Following months of double-digit growth, the new vehicle market in South Africa is now showing signs of a slowdown, with September sales rising just 1.4% year-on-year to 55,097 units, according to data from the National Association of Automobile Manufacturers of South Africa (NAAMSA). Last month’s sales were also down slightly from August’s total of 56,253 units, which was up 3.3%. For the year-to-date, vehicle sales remained up 10% from the same period last year.
The agency attributes September’s slower growth rate in part to a high base effect – September 2011 was a particularly strong sales month. It notes that the high level of industrial action affecting a growing number of sectors has dampened business confidence in the country. “Consumers similarly would have been affected and concerns about the macro socio- economic environment in the country was likely to have resulted in a deferral of purchasing decisions,” NAAMSA explains.
By segment, new car sales last month accounted for 39,496 units, up 4.4% compared to the 37,829 new cars sold during September 2011. Year to date new car sales are 11.5% ahead of the corresponding nine months of 2011. NAAMSA notes that car sales continue to benefit from strong demand from car rental companies; the car rental industry accounted for 18.6% of total sales last month.
Sales of new light commercial vehicles, bakkies and mini buses fell 5.2% in September to 13,279 units, due to a general decline in business confidence. Sales of medium and heavy trucks fell 8.6% and 7.7%, respectively, to 779 and 1,543 units, again reflecting lower business confidence.
Exports of vehicles made in South Africa last month rose 2.7% to 26,638 units. NAAMSA warns that while overall light vehicle exports are expected to increase substantially in 2013, shipments to Europe will remain under pressure as the automotive industry within the euro zone remains plagued with overcapacity and sluggish demand.
For the remainder of the year, NAAMSA expects several factors to support domestic sales, including low interest rates, ongoing improvement in vehicle affordability in real terms, attractive incentives and new model introductions. Domestic sales for 2012 are forecast to rise 10% from 2011 levels.
Looking ahead to 2013, increasing inflationary pressures on the back of expected higher fuel and food prices and the impact of Rand weakness on new vehicle pricing will likely cause more subdued growth in vehicle sales.
