Pretoria - New car sales, which from the month-on-month sales figures have been showing tentative signs of a recovery, were dented last month by a reduction in sales to car rental companies.
Figures released on Thursday revealed that sales in the consumer driven new car market dropped 13.8 percent to 28 334 units last month from the same month last year.
Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa (Naamsa), said the car rental industry accounted for 13.3 percent of all new cars sold during the month.
Vermeulen said this was lower than the monthly car rental sales since the beginning of the year and could be attributed to the run-out of the refleeting cycle.
Sales to the car rental industry reached a peak this year in October, when they accounted for 16.5 percent of all new cars sold.
Azar Jammine, the chief economist at Econometrix, said the car market was very weak last month but this was not a reflection of lower consumer spending because it had been caused by lower sales to the car rental industry.
Jammine said he had plotted the month-on-month level of car sales from May to October this year and to his amazement had noted a steep upward trend despite a dip in sales in July.
He forecast mildly positive growth in new vehicle sales for next year and that the market would not experience any further negative growth into next year.
Jammine attributed this reversal in the negative growth trend to the sharp decline in car price inflation. This resulted from the stronger rand and meant a big factor contributing to sales weakness had “dropped out of the equation”, he said.
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Vermeulen said on the assumption the economy grew about 1 percent in real terms next year, new vehicle sales could grow next year by3 percent to 4 percent.
However, Nicholas Nkosi, the head of Standard Bank Vehicle and Asset Finance, Retail Banking, said new passenger vehicles continued to show strain and they anticipated car sales challenges continuing into next year.
Sales of new light commercial vehicles, bakkies and mini buses increased last month to 15 632 units, 1 percent up from November last year.
But year-on-year sales of medium commercial vehicles dropped last month by 18.7 percent to 830 units and heavy truck and bus sales by 17.1 percent to 1 617 units.
Vermeulen said the latest medium and heavy commercial vehicle sales figures suggested continued lower levels of capital investment in the economy and reflected the subdued local economic conditions.
WesBank chief executive Simphiwe Nghona blamed the drop in new vehicle sales to affordability, adding that sales volumes of premium brands had declined noticeably.
Nghona said the average new vehicle financed last month cost R293 500, a year-on-year increase of 12 percent.
“Consumers continue to battle with affordability in the new market. This is most evident in the premium segments, where sales have fallen markedly," he said.
New vehicle exports improved to 31 508 vehicles last month, up 12.1 percent from November last year.