WINDHOEK – Increased interest rates have thrown a spanner in the sales of new vehicles, which have been high in the early months of the year. According to the National Association of Automobile Manufacturers of South Africa (NAAMSA) – the association that virtually keeps track of new vehicle sales in South Africa, and by extension Namibia, Botswana, Lesotho, and Swaziland – the vehicle sales outlook for the reminder of the year does not look good, because of “recent increases in interest rates.” This is compounded by the “relatively low economic growth, and above inflation new vehicle price increases, all which would combine to dampen new vehicle sales momentum.”
South Africa’s vehicle sales volumes, in particular, are expected to show a decline of between 4 and 5 percent compared to 2013.
Naamsa’ assessment is based on August vehicle sales which had shown a marginal decline year-on-year. Export sales, however, had staged a strong recovery.
“Domestic new vehicle sales had continued to show resilience, for the third month in a row, despite subdued economic growth and pressure on consumers’ disposable income,” said NAAMSA yesterday. August aggregate new vehicle sales at 55 751 vehicles had registered a modest decline of 738 vehicles or a fall of 1.3 percent compared to the 56 489 vehicles sold in August last year.
Overall, out of the total reported industry sales of 55 751 vehicles, 79.8 percent represented dealer sales, 13.1 percent represented sales to the vehicle rental industry, 3.6 percent to industry corporate fleets and 3.5 percent to government. Assisted by another strong contribution by the car rental industry, the new car market during August, 2014 had performed relatively well and at 37 982 units reflected a decline of 1 018 vehicles or a fall of 2.6 percent compared to the 39 000 new cars sold in August last year.
Domestic sales of new light commercial vehicles, bakkies and mini buses at 14 942 units during August, 2014 reflected an improvement of 306 units or 2.1 percent compared to the 14 636 light commercial vehicles sold during the corresponding month last year.
Compared to the corresponding month last year, sales of vehicles in the medium and heavy truck segments of the industry at 1 006 units and 1 821 units, respectively, reflected a mixed picture with medium commercial vehicle sales showing a slight decline of 36 units or 3.5 percent whilst heavy trucks and buses registered a marginal improvement of 10 units or 0.1 percent.
Overall, continued strength in commercial vehicle sales was encouraging and suggested improved investment sentiment. Industry new vehicle exports during August, 2014 at 25 027 vehicles had registered a substantial improvement of 3 911 units or a gain of 18.5 percent compared to the 21 116 vehicles exported in August last year.
Against the background of more normalised industry vehicle production volumes, a further improvement in export numbers was anticipated over the remainder of 2014.