July was dismal new vehicle sales

According to figures released today by the National Association of Automobile Manufacturers of South Africa (NAAMSA) this brings the year on year decline to 25,9%.

Particularly noteworthy is also the decline in export sales, although there was a modest increase in sales of over June of light, medium and extra heavy commercial vehicles and buses.

Of the total reported sales 76,2% (23 430 units) represented dealer/retail sales, 14,7% sales to the car rental industry, 5,1% sales to Government and 4,0% sales into auto industry corporate fleets.

New car sales of 18 818 units reflected a decline of 7 181 units or 27,6% compared to the 25 999 new cars sold during July 2008.

Sales of NAAMSA new light commercial vehicles, bakkies and minibuses at 10 179 units during July 2009 reflected a decline of 2 952 vehicles or 22,5% compared to the 13 131 units of the corresponding month last year.

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 1 176 units respectively, had registered 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.

Busses buck the trend

In sharp contrast, sales of new buses at 263 units had shown a record year on year improvement of 124 units or 89,2% compared to the 139 reported sales in July last year.

With seven months of calendar 2009 accounted for, aggregate industry new vehicle sales at 224 706 units reflected a decline of 32,7% compared to 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 to the 28 264 vehicles exported during July last year.

The trading environment during July, 2009 had remained fundamentally weak with all sectors of the South African automotive industry continuing to experience severe sustainability challenges.

NAAMSA says an 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.

Concerns remain

A NAAMSA spokesman 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.”

A little ray of sunshine came from Renault South Africa which reported a 2.64% share of the market in July 2009 which is up 1.7% on July last year - and which reflects Renault's best result since June 2007.

Confident

“We have enjoyed a consistent increase in sales since the beginning of the year and are confident that, with more models to be launched before the end of this year combined with the growing acceptance of Sandero in the market place, the trend will continue and even amplify,” said Régis Fricotte, Vice-President of Marketing at Renault South Africa.

“By year end, with top quality, affordable representation in virtually every segment of the passenger car market, Renault will have the freshest product range in South Africa.”