Demand for new vehicles slowed sharply last month as the number of vehicles sold to the vehicle rental industry plunged.
Figures released by the National Association of Automobile Manufacturers of SA (Naamsa) yesterday revealed that total vehicle sales, excluding Mercedes-Benz South Africa because it is still not reporting its sales in detail, increased year on year by only 1.6 percent to 53 220 units from February last year.
Total vehicle sales in January this year grew 14 percent to 52 775 units. Sales registered last month were 3 percent lower than in the first month of the year.
Naamsa said sales to the vehicle rental industry slumped last month to 6.6 percent of total sales from 16.7 percent in January.
Vehicle rental industry sales accounted for 7.6 percent of the total 49 556 unit sales in February last year.
Econometrix chief economist Azar Jammine said last year was a leap year, resulting in an additional sales day in February, which would also affect the year-on-year figure.
But he said the figures were indicative of a slackening off in the rate of growth in new vehicle sales, which had been on the cards for some time.
It would be unreasonable to expect new vehicle sales to continue motoring ahead in light of the high base established over the past few years, Jammine added.
Total new vehicles sold last year, at 623 914 units, was the highest annual sales achieved after the record 714 315 vehicles sold in South Africa in 2006.
Jammine said the vehicle industry had been completely out of line with other economic sectors and this could not carry on indefinitely, warning there was not any certainty that the industry would not experience negative growth before the end of this year.
From an economic perspective, Jammine said the sales figures were indicating that the economy was “muddling along” and not strong enough to create many jobs but not a disaster either, which was in line with what was happening in the global economy.
Naamsa figures revealed new car sales grew last month by 0.8 percent to 36 666 units from February last year.
Sales of new light commercial vehicles, bakkies and minibuses increased 4.7 percent year on year to 14 190 units while sales of medium commercial vehicles declined by 7.6 percent to 868 units and heavy trucks and buses fell by 2.4 percent to 1 496 units in the same period.
Nissan South Africa’s sales, marketing and aftersales director, Johan Kleynhans, said the expected decrease in new vehicle sales to the rental channel affected overall sales last month.
Sydney Soundy, the head of Standard Bank vehicle asset finance, said for the past three years the month of February had on average been about the sixth-lowest month in terms of sales volumes
If this trend continued this year there would be another six months with higher sales than February, which would augur well for sales growth for this year, he said.
WesBank executive head of sales and marketing Chris De Kock said new vehicle sales last month were in line with expectations that growth would taper off this year because of rising fuel prices, increases in the general consumer inflation rate and new vehicle price inflation.
However, De Kock said while growth of new vehicles was expected to remain subdued, the motor industry would be very content to sell the same strong volume of vehicles as it did last year.