• September 19th, 2018
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Decline in new vehicle sales expected this year

Windhoek For the second year in succession, new vehicle sales during 2015 in South Africa and Namibia recorded a year-on-year decline. According to the National Association of Automobile Manufacturers of South Africa (NAAMSA) further slowdown in the South African economy, increases in interest rates, pressure on consumers’ disposable income and new vehicle inflationary pressures contributed to a fall in total domestic sales volumes of 4.1 percent for the year. In the event, aggregate sales during 2015 declined by 4.1 percent volume terms to 617 927 units compared to the sales total of 644 259 in 2014. “It is against this background that the outlook for domestic sales in 2016 remains uninspiring and, at this stage, a decline in total new vehicle sales of between 3.0 percent and 5.0 percent is anticipated. The consumer driven new car market is likely to show a decline in volumes at the upper end of the range with new commercial vehicle sales projected to perform better in relative terms,” said NAAMSA in a statement. With the exception of light commercial vehicle sales, industry sales ended 2015 on a weak note with aggregate industry new vehicle sales at 49 250 units recording a decline of 2 171 vehicles or a fall of 4.1 percent compared to the total new vehicle sales of 51 421 units during the corresponding month of December, 2014. NAAMSA figures, which include Namibia’s new vehicle sales, show that December 2015 new passenger car market and light commercial vehicle market reflected a year on year volume change of minus 7.6 percent in the case of cars and a gain of 4.6 percent in the case of light commercial vehicles. Sales of medium and heavy commercial vehicles declined by 2.1 percent year on year. Export sales had recorded a fairly substantial decline in December, 2015 and at 17 391 units reflected a fall of 4 439 vehicles or 20.3 percent compared to the 21 830 vehicles exported during December, 2014. “Overall, 2015 turned out to be a difficult year for the South African automotive industry with domestic new vehicle sales under pressure, particularly at dealer level, despite attractive incentives and a strong contribution by the car rental sector which accounted for an estimated 12.5 percent of new car sales during the year. Industry trading conditions remained intensely competitive with over 52 brands and 2 595 model derivatives, in the new car and light commercial vehicle sectors, competing for consumers’ franchise. Preliminary estimates indicate that motor industry new vehicle related sales turnover had grown by only about 3.6 percent, based on sales volumes and a weighted average estimated increase of about 6.5 percent in new vehicle prices, during 2015 to reach about R235 billion for the year. Industry new vehicle export sales were estimated to have added a further R80 billion to total Industry 2015 revenue,” NAAMSA explained. Meanwhile, 2015 vehicle exports represent the highest annual industry export figure on record and total vehicle exports at 333 748 units were well up on the 276 936 vehicles exported in 2014. “Assuming further improvement in the global economy, industry export sales during 2016 could improve by some 42 000 vehicles or about 12.5 percent to reach a conservative projection of 380 000 export units,” NAAMSA continued that 2016 is expected to be a lacklustre year for the SA automotive industry, particularly in the case of domestic new vehicle sales. Industry production levels, on the back of expected further growth in vehicle exports, should however remain in an upward phase. Domestically, economic growth continues to disappoint and South Africa’s fiscal position remains under pressure as a result of difficulties experienced by a number of state owned enterprises, rising expenditure on social programmes and increased debt servicing costs. “South Africa’s economic situation remains constrained with expectations of sluggish economic growth of around 1.0 percent at best. The volatile and sharply weaker exchange rate reflects poor international perceptions. The sharply lower value of the Rand will translate into upward pressure in inflation, particularly in the case of new vehicle prices in the coming year. The impact of the severe drought throughout the country will also negatively affect economic growth. Expectations of further increases in interest rates and administered prices (electricity, water, fuel) will further pressurise personal disposable income,” said the association.
2016-01-12 09:52:02 2 years ago
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