Bumper month for vehicle exports in February

The positive momentum of the new-car market suggests that consumer demand locally is bearing up‚ but that various factors are combining to subdue growth.

However‚ South African exporters had yet another bumper month‚ registering "substantial gains, rising by 5‚057 units or 22.4% compared with the 22‚554 vehicles exported in February last year"‚ says Naamsa.

South Africans bought 53‚220 new vehicles in the month‚ "an improvement of 832 vehicles or a gain of 1.6% compared with the 52‚388 vehicles sold in February last year"‚ Naamsa said in a press release.

This reflected a 3.4% decline month-on-month - mainly as a result of a decline in new passenger car sales of 7.62%.

However, this was as a result of "high growth in January 2013 [which] was largely driven by the car rental volumes"‚ Standard Bank's head of asset finance Sydney Soundy said in a release.

This "had an effect in setting a base that would create negative growth in February". He said. SA hosted the African Cup of Nations earlier this year which contributed to the increased rental demand.

Used cars

Declining growth in new vehicle sales did not surprise WesBank's head of sales and marketing‚ Chris de Kock. "We have been predicting for some time that there will be a slowdown in the growth of new vehicle sales‚" he said in a press release.

"Two major influencers on new car sales over the last few years were the low interest rate environment and low inflation on new vehicles. However‚ price increases feeding through mainly as a result of the weakening rand‚ are moving the CPI component on new vehicles upwards‚" De Kock said.

He also said that an increase in the supply of used vehicles would ensure consumers found increasing value in used cars.

"At the same time‚ dealers are paying less for used cars as the supply and demand side of this market corrects itself‚ with the result that the pricing gap between new and used will grow and consumers are likely to start seeing more value in used vehicles again."

According to Naamsa‚ consumers were also acting to head off feared price rises as a result of the weaker rand.

"Exchange rate weakness probably contributed to pre-emptive buying by consumers to avoid higher expected new vehicle prices‚" Naamsa said.

Soundy said continued low interest rates‚ the competitive environment and replacement demand were driving the market.

He said‚ however‚ that lower levels of disposable income‚ high consumer debt levels‚ the weak currency's effect on car prices and sluggish growth in the economy were all factors that weigh on future sales growth.

The rate of South African exports was "expected to improve further for the rest of the year‚" Naamsa said.

"Exports of light commercial vehicles should increase substantially during 2013‚" it said.