Septem­ber a bleak month for SA, U.S.

The Witness - Wheels - - MOTORING -

THE re­ces­sion in the do­mes­tic new ve­hi­cle mar­ket had ac­cel­er­ated sig­nif­i­cantly dur­ing Septem­ber, ac­cord­ing to the lat­est sales num­bers re­ported by the Na­tional As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers of South Africa (Naamsa).

All ma­jor seg­ments re­flect­ing dou­ble digit or near dou­ble digit de­clines. Only 47 399 ve­hi­cles were re­ported sold, a sub­stan­tial de­cline of 7 904 ve­hi­cles (or a fall of 14,3%) com­pared to the 55 303 ve­hi­cles sold in Septem­ber last year.

Even ex­ports of new mo­tor ve­hi­cles had also re­flected a year-on-year de­cline. Ag­gre­gate in­dus­try ex­port sales at 32 876 ve­hi­cles for Septem­ber, 2016 re­flected, some­what sur­pris­ingly, a de­cline of 2 278 ve­hi­cles or a fall of 6,5% com­pared to the 35 154 ve­hi­cles ex­ported in Septem­ber last year.

Do­mes­tic sales of in­dus­try new light com­mer­cial ve­hi­cles, bakkies and mini buses at 12 879 units dur­ing Septem­ber, 2016 had also turned sharply weaker re­flect­ing a de­cline of 2 243 units or a fall of 14,8% com­pared to the 15 122 light com­mer­cial ve­hi­cles sold dur­ing the cor­re­spond­ing month last year.

Sales of ve­hi­cles in the medium and heavy truck seg­ments of the in­dus­try at 783 units and 1 780 units, re­spec­tively, had also reg­is­tered sub­stan­tial falls and, in the case of medium com­mer­cial ve­hi­cles, re­flected a de­cline of 77 units or nine per­cent and in the case of heavy trucks and buses, a de­cline of 216 ve­hi­cles or a fall of 10,8% com­pared to the cor­re­spond­ing month last year.

More gloom ahead

Naamsa said in a state­ment deal­ers ex­pected the neg­a­tive trend to con­tinue over the medium term, given the present dif­fi­cult eco­nomic en­vi­ron­ment in South Africa.

“Do­mes­ti­cally, the short to medium term out­look re­mained un­favourable. Dou­ble digit new ve­hi­cle price in­creases, low lev­els of con­sumer and busi­ness con­fi­dence and rel­a­tively high in­ter­est rates would con­tinue to pres­surise sales of new mo­tor ve­hi­cles, par­tic­u­larly new cars,” said Naamsa.

The only ray in a gloomy cloud is the ex­pec­ta­tion that mo­men­tum of new ve­hi­cle ex­ports would im­prove fur­ther over the bal­ance of 2016.

For the year and into 2017, new ve­hi­cle ex­ports should con­trib­ute pos­i­tively to South Africa’s cur­rent ac­count of the bal­ance of pay­ments re­in­forced by lower ve­hi­cle im­ports on the back of de­clines in the do­mes­tic mar­ket.

One key eco­nomic in­di­ca­tor which pro­vided some ba­sis for op­ti­mism was the re­as­sur­ing re­cov­ery in South Africa’s Pur­chas­ing Man­ager’s Index in Septem­ber, 2016 which had recorded an im­pres­sive rise of 3,2 points to 49,5 in Septem­ber — just be­low the key bench­mark of 50. Other ma­jor in­ter­na­tional Pur­chas­ing Man­ager’s in­dices had also reg­is­tered wel­come im­prove­ment.

U.S. also sees less cars sold

South Africa is not alone in suf­fer­ing a re­ces­sion in car sales. Reuters re­ports ma­jor au­tomak­ers in the U.S. re­ported their sec­ond straight de­cline in monthly U.S. sales, af­ter heavy dis­count­ing failed to bring de­mand up to last year’s ro­bust Septem­ber sales.

Twenty-four econ­o­mists polled by Thom­son Reuters ex­pect Septem­ber sales of 17,3 mil­lion ve­hi­cles in the U.S., with es­ti­mated de­clines rang­ing up to 2,5% — or over 432 000 ve­hi­cles on a sea­son­ally ad­justed an­nu­alised ba­sis.

Just this monthly drop in unit sales in the U.S. is al­most 10 times more than SA’s to­tal sales in Septem­ber.

As car deal­ers are do­ing in South Africa, U.S. au­tomak­ers are try­ing to at­tract buy­ers with dis­counts, on av­er­age at $3 923, or R53 612 per new ve­hi­cle sold.

Eight an­a­lysts polled by Reuters ex­pect U.S. sales de­clines of 2,3% for Gen­eral Mo­tors Co., 8,5% for Ford Mo­tor Co. and 1,3% for Fiat Chrysler Au­to­mo­biles. Six an­a­lysts polled by Reuters showed ex­pec­ta­tions that Toy­ota Mo­tor Cor­po­ra­tion’s U.S. sales would show a 1,1% rise; Honda Mo­tor Co., up 0,9%; and then-com­bined sib­ling com­pa­nies Hyundai Mo­tor Co and Kia Mo­tors Cor­po­ra­tion, a 0,3% in­crease.

Nis­san Mo­tor Com­pany, the first to re­port on Mon­day, said its Septem­ber U.S. sales were 127 797 ve­hi­cles, up five per­cent, against ex­pec­ta­tions of an­a­lysts who fore­cast a 0,4% de­cline.

PHOTO: FILE

A weak rand and lack of credit are ham­per­ing car sales at new car deal­ers as well as on used car lots through­out SA.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.