July new vehicle sales down 27.4%

Aggregate NAAMSA reported new vehicle sales for July 2009 at 30 731 units reflected a decline of 11 606 vehicles or 27.4% compared with the 42 337 units sold during the corresponding month last year.

Factoring in aggregate vehicle sales reported by the AMH Group, the year on year decline amounted to 25.9%.

NAAMSA said that domestic new car and commercial vehicle sales had remained disappointingly weak, registering further sharp declines compared with the corresponding month last year. Export sales in particular had again declined substantially.

However, in various segments such as light, medium and extra heavy commercial vehicles and buses, the July sales had recorded a modest improvement compared with the previous month of June, 2009.

Overall, out of a total NAAMSA reported industry sales of 30 731 vehicles, 76.2% or 23 430 units represented dealer/retail sales, 14.7% sales to the car rental industry, 5.1% sales to government and 4% sales into auto industry corporate fleets.

For July 2009 NAAMSA reported new car sales at 18 818 units reflected a decline of 7 181 units or 27.6% compared with the 25 999 new cars sold during July 2008. Factoring in aggregate new car sales reported by the AMH Group, the year on year decline had amounted to 7 380 units or a fall of 25.1%.

Sales of NAAMSA new light commercial vehicles, bakkies and minibuses at 10 179 units during July 2009 reflected a decline of 2952 vehicles or 22.5% against 13 131 units of the corresponding month last year. Taking account of the light commercial vehicle sales reported by the AMH Group, the year on year decline amounted to 3191 units or 23%, the association said.

Sales of vehicles in the medium and heavy truck segments of the industry - with the exception of the bus sector - had also remained weak and the July 2009 sales at 558 units and 1176 units, respectively, meant a decline of 478 units or 46.1%, in the case of medium commercials and 995 units or 45.8%, in the case of heavy and extra heavy trucks and buses - compared to 2008.

In contrast, sales of new buses at 263 units revealed a record year on year improvement of 124 units or 89.2% compared to the 139 reported sales in July last year. Weakness in medium and heavy truck sales reflected lower investment spending along with difficulties experienced by truck operators in accessing loan finance, NAAMSA pointed out.

Substantial decline

With seven months of calendar 2009 accounted for, aggregate industry new vehicle sales at 224 706 units reflected a decline of 32.7% compared with the 334 003 vehicles sold during the corresponding seven months of last year.

"Sharply lower levels of demand in South Africa's major export markets had contributed to a further huge decline in the number of vehicles exported by the industry during July 2009. Aggregate export sales at 11 220 vehicles had registered a decline of 17 044 vehicles or a fall of 60.3% compared with the 28 264 vehicles exported during July last year," NAAMSA said.

It added that the trading environment during July remained fundamentally weak with all sectors of the South African automotive industry continuing to experience severe sustainability challenges.

"Improvement in the automotive industry's domestic operating environment would depend on a revival in consumer spending on the back of lower interest rates as well as on stimulatory government expenditure. Improvement in vehicle exports would depend on a recovery in global economic conditions and a return of confidence in international financial markets," NAAMSA said.

"Despite tentative signs that the slump in global economic activity was bottoming out, concerns about a second half domestic economic recovery continue - with good reason. Most current economic indicators reflect an economy under pressure and firmly in recession with declines in wholesale and retail spending, industrial production and construction activity.

"Moreover, the employment picture remained bleak. In the circumstances and given the latest dismal new vehicle sales figures, a further relaxation in monetary policy appears justified - particularly in light of recent declines in consumer and production price inflation," the association concluded.

Published courtesy of
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