Vehicle sales figures in S Africa continue their downward trend

VEHICLES sales in South Africa remained muted in September with a 0.9 percent aggregate decline.

Data from the National Association of Automobile Manufacturers of South Africa (Naamsa) yesterday showed the industry sold 439 units less than the 49 630 sold at the same time last year.

Naamsa said the industry, which has been in a slide for several years, was saved blushes by the car rental industry, whose uptake in the volume passenger car segment provided an unexpected uptick. But the sales represented the largest volume month for the year so far and were the second-best performing month year-onyear after April’s 0.7 percent increase.

Monthly export sales registered a modest decline compared to the high base level of the corresponding month last year but the upward momentum remains strong.

Light commercial vehicles, bakkies and mini-buses sold 13 473 units during the period from 14 367 last year.

Medium and heavy trucks reflected a mixed performance with 790 and 1 789 units respectively, reflecting an increase of 14 percent from last year.

“Although vehicle exports declined during the month compared to the corresponding month of last year, exports remain the main driver of vehicle production activity in the domestic market. The vehicle export momentum remains upward with the industry on track to achieve a new record in 2019,” Naamsa said.

Naamsa said that it expected consumers and businesses will continue to delay purchasing decisions on big items such as new vehicles until there is greater economic stability all around and they are more optimistic about their economic future.

“Although the economy grew in the second quarter of the year off the first quarter’s very low base, the underlying pace of activity remains weak. The second consecutive large fall in the Absa Purchasing Managers’ Index (PMI), from 45.7 index points in August 2019 to 41.6 index points in September 2019, reiterated the weak underlying demand conditions. The Absa PMI index tracking business conditions in six months’ time also declined, expecting the environment to worsen further going forward”, Naamsa said.

Ghana Msibi, WesBank executive head of the motor division, said the bank’s own inflation data largely mirrored that of the general economy, with an average deal size slightly above the South African number.

“This infers that new and used car price inflation falls within the general affordability challenge for cashstrapped South African households. Of greater concern is the need for South Africans to extend their car repayment contracts towards the maximum 72 months, while adding balloon payments to reduce the monthly instalment amount,” he said.