Car sales plunge to five year low

The total unit sales of 34,176 is a drop of 13,497 from last November's 47,673.

The National Association of Automobile Manufacturers of South Africa (NAAMSA) said sales in all segments of the new vehicle market had weakened significantly in line with economy which had continued to deteriorate rapidly.

On average, sales for the first eleven months of 2008 were 20,7% lower than the sales recorded during the corresponding eleven months in 2007.

Overall, out of the total NAAMSA reported industry sales of 34,176 vehicles, 77,9% or 26,613 units represented dealer/retail sales, 8,9% sales to Government, 7,7% represented sales to the car rental industry and 5,5% into industry's corporate fleets.

November's reported new car sales at 20,128 units reflected a decline of 9,210 or 31,4% compared to the 29,338 new cars sold during November, 2007. Factoring in the new car sales not reported in detail, the year on year decline had amounted to 11,096 units or a fall of 33,6%.

The latest sales represented the worst monthly new car market in the past five years.

Sales of light commercial vehicles, bakkies and minibuses at 11,489 units reflected a decline of 3,475 units or 23,2% compared to the 14,964 unit sales during the corresponding month last year. Taking account of the light commercial vehicles sales reported by the AMH Group, the year on year decline amounted to 3,820 units or 23,9%.

Sales of vehicles in the medium and heavy truck/bus segments of the industry had also registered sharp falls during November, 2008 and at 868 units and 1,691 units, respectively, had recorded a massive decline of 372 units or 30,0%, in the case of medium commercials, and 440 units or 20,6%, in the case of heavy trucks and buses.

In sharp contrast to the depressed domestic market, exports of South African produced motor vehicles continued strong upward momentum to a record a monthly total of 31,557 export sales.

This represented an improvement of 14,616 vehicles or 86,3% compared to the 16,941 vehicles exported during November last year.

On a year to date basis export sales reflected an impressive year on year improvement of 73,1%. Vehicle exports for 2008 as a whole were now projected to reach about 295,000 units.

The local new and used vehicle retail sector continued to experience severe financial distress. The combined impact of recent above average vehicle price inflation, the high interest rate environment, the negative wealth effect as a result of falling house prices and asset values, sharp falls in business confidence and consumer sentiment was expected to continue to exert further pressure on domestic sales.

NAAMSA says that even if the monetary authorities implemented reductions in interest rates in the coming months, trading conditions in the domestic market were only expected to show an improvement from the second half of 2009 onwards.