New Vehicle Sales Increased but Could Be Affected By Subdued Economic Growth

In amplification of the new vehicle sales statistics for the month of March, 2014, released on Tuesday for public consumption via the website of the South African Department of Trade amp Industry, the National Association of Automobile Manufacturers (NAAMSA) commented that total aggregate new vehicle sales had held up reasonably well, virtually unchanged from the aggregate sales of the corresponding month last year.

The NAAMSA figures include new vehicles sold in Namibia. In the event, March 2014 aggregate new vehicle sales at 55 363 units registered a decline of 87 vehicles or a fall of 0.2 percent compared to the 55 450 vehicles sold in March last year. The consumer driven new car segment had recorded a year on year decline of 2.2 percent whilst the investment trend sensitive commercial vehicle segments had registered gains, light commercials 3.7 percent, heavy commercial vehicles 7.6 percent and extra heavy trucks 20.8 percent. The March 2014 export sales number at 24 660 units reflected a decline of 3 122 vehicles or a fall of 11.2 percent compared to the 27 782 vehicles exported in March last year.

Overall, out of the total (disaggregated) reported Industry sales of 55 343 vehicles, 85.8 percent or 47 505 units represented dealer sales, 5.0 percent to government, 4.7 percent represented sales to the vehicle rental Industry and 4.5 percent to industry corporate fleets.

The new car market had remained under pressure during March, 2014 and at 36 798 units reflected a decline of 814 units or a fall of 2.2 percent compared to the 37 612 new cars sold in March last year.

Domestic sales of new light commercial vehicles, bakkies and mini buses at 15 848 units during March 2014 reflected a useful improvement of 559 units or 3.7 percent compared to the 15 289 light commercial vehicles sold during the corresponding month last year.

Sales of vehicles in the medium and heavy truck segments of the Industry at 947 units and 1 770 units, respectively, reflected a mixed performance with a decline of 61 units or a fall of 6.1 percent, in the case of medium commercial vehicles, and an impressive gain of 229 units or an improvement of 14.9 percent, in the case of heavy trucks and buses, compared to the corresponding month last year.

Industry new vehicle exports during March, 2014 at 24 660 vehicles had registered a decline of 3 122 units or a fall of 11.2 percent compared to the 27 782 vehicles exported in March last year. From the middle of 2014, the momentum of Industry vehicle exports should pick up substantially on the back of the commencement of the Mercedes-Benz C-Class export programme. Prospects for the balance of the year are expected to continue to be affected by subdued economic growth, above inflation new vehicle price increases as a result of exchange rate weakness and upward pressure on interest rates. Consumer sentiment remained under pressure due to high levels of indebtedness, sharp increases in energy and transport costs and e-tolling in Gauteng. These factors are expected to influence consumer demand, principally in the case of the new car market.

Domestic trading conditions were anticipated to remain difficult with pressure on margins, particularly in the new car and light commercial vehicle sectors. As a result of the challenging macro-environment, general consensus was that the domestic market in 2014 was likely to be flat and might even show modest declines, in the various segments, compared to 2013. Vehicle exports, however, should benefit from improving global economic conditions and, barring domestic supply disruptions, could well show g growth during the second half of 2014 particularly in respect of vehicle exports to Asia, Africa and Europe.

Source : New Era