Another bad month for new vehicle sales

Total sales dropped by 10,103 units from 57,881 in March 2007 to 47,778 this year.

Hardest hit was the passenger car segment where the cumulative effect of interest rate increases and rising pressure on disposable income due to rising food, fuel and energy costs pushed sales down 23.1% from 36,038 in March 2007 to 27,724 units in March this year.

According to NAAMSA negative consumer sentiment and business confidence had also continued to impact on sales.

However, the drop in sales for March this year should be seen in context: March 2007 was a record year for new vehicle sales in South Africa and this year the Easter holidays fell in March, which reduced the number of selling days.

On a more positive note, this year's March figure is slightly up on February's totals.

Overall, out of the total NAAMSA reported industry sales of 47,778 vehicles, 88% represented dealer/retail sales, 3.1% sales to the car rental industry, 3.7% sales to government and 5.2% sales into NAAMSA member company fleets.

Sales of new light commercial vehicles, bakkies and minibuses are down 10.7% from 18,612 to 16,616.

As has been the trend since the beginning of this year, sales of medium and heavy trucks maintained their upward momentum, albeit at a lower growth rate. March 2008 sales of 1,321 units and 2,117 units, respectively, showed an improvement of 33 units (2.6%) in the case of medium commercials and 174 units (9.0%) in the case of heavy trucks and buses.

During March this year the local industry exported 22,888 new vehicles. This represents the best export sales month on record and constitutes a massive improvement of 8,028 vehicles or 54% compared to the 14,860 vehicles exported during March last year.

The industry's March export sales performance, compared to February 2008, shows an improvement of 2,271 export units or a gain of 11%.

NAAMSA says the industry's sustained export sales growth confirms that the Motor Industry Development Programme represents the appropriate policy framework to safeguard the sustainability of the South African vehicle and component manufacturing industries.

“Record growth in vehicle exports during 2008 will benefit domestic component and vehicle manufacturing operations and will contribute positively to South Africa's trade balance which, in turn, should enhance the automotive industry's overall contribution to gross domestic product,” a spokesperson said.

The organisation says it expects the new car and light commercial vehicle sectors to remain under pressure as a result of tighter monetary conditions, growing inflationary pressures, high levels of household debt and a modest slow-down in economic activity levels.

The medium and heavy truck segments were expected to continue to perform relatively well and register positive growth during 2008. In contrast to the weak domestic sales environment, production of new motor vehicles was expected to increase substantially during 2008 on the back of significantly higher vehicle exports.