August new vehicle sales down 0.3% y/y

Export sales in August registered a decline as well, falling 22.9% in volume terms.

On a year to date basis‚ however‚ aggregate sales‚ after four years of growth in the domestic market‚ continued to register modest growth with year to date domestic sales improving by 5.9% compared with the corresponding eight months of last year.

Naamsa said that the August 2013 new vehicle sales were largely in line with industry expectations. "By virtue of existing inventory levels in the industry‚ the impact on domestic sales of the current industrial action at the seven major vehicle manufacturing plants had to date been muted.

"The main impact of the strike action to date had been on the industry's export performance and particularly the export operations of BMW and Ford Motor Company which had been negatively affected due to other industrial action which preceded the current industry strike - now in its third week," Naamsa said.

"The full negative impact would be reflected in the September 2013 domestic sales and particularly on industry export numbers‚" the association added.

Sales numbers

Overall‚ out of the total reported Industry sales of 56‚112 vehicles in August‚ 46‚442 units or 82.8% represented dealer sales‚ 11.4% represented sales to the vehicle rental Industry‚ 3.3% to industry corporate fleets and 2.5% to government.

A total of 38‚892 new cars were sold which represented a decline of 1‚487 units or a fall of 3.7% compared with the 40‚379 new cars sold in August last year.

The car rental industry again contributed positively to the August sales numbers and accounted for 15.3% of new cars sold during the month.

There were 14,376 light commercial vehicles‚ bakkies and mini buses sold during the month, reflecting an increase of 726 units or 5.3% compared with the 13‚650 light commercial vehicles sold during the corresponding month last year.

Sales of vehicles in the medium and heavy truck segments reached 1‚038 units and 1‚809 units‚ respectively‚ an increase of 201 units or 24% in the case of medium commercial vehicles‚ and an increase of 405 units or 28.8% in the case of heavy trucks and buses.

"The excellent performance in sales of light‚ medium and heavy trucks suggested higher levels of investment spending in the economy and were in part related to infrastructural development projects‚" Naamsa said.

Exports

Industry new vehicle exports during August‚ at 19‚284 vehicles registered a substantial decline of 5‚740 units or a fall of 22.9% compared with the 25‚024 vehicles exported in August last year.

This could be attributed to the strike at the seven major manufacturing plants and further production losses would be reflected in anticipated lower export numbers for September. As a result‚ annual projected industry export sales would be revised downwards‚ Naamsa pointed out.

One of the negative consequences of the strike was that it undermined SA's status as a reliable supplier to international export markets and could negatively affect future export contracts being awarded to South African automotive manufacturers.

Naamsa said that labour stability represented a key consideration in decisions by multi-national corporations to allocate vehicles for production in SA.

Unless the strike action was settled in the next few days‚ the damage to future prospects and on foreign investment sentiment could be far reaching and take years to redress.

Domestically‚ the association said‚ expectations of lower economic growth and above-inflation new vehicle price increases would contribute to a more difficult trading environment.

Despite a less promising outlook for the automotive sector for the balance of the year‚ it was still likely to be the second or third best year on record in terms of domestic sales.

The prevailing low interest rate environment is lending support to the domestic market along with the replacement demand‚ the highly competitive trading environment‚ the ongoing attractive incentives and the high technology new model introductions.