Passenger car sales stuck in reverse

011215 Naamsa vehicles sale for November 2015.Photo Simphiwe Mbokazi 7

011215 Naamsa vehicles sale for November 2015.Photo Simphiwe Mbokazi 7

Published Dec 2, 2015

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Johannesburg - Passenger car sales again declined year on year in November and for 10 of the 11 months so far this year these sales have fallen when compared with the prior year.

The only positive growth in passenger car sales this year was a 1.5 percent rise in February compared to February 2014.

Total year-to-date passenger car sales at 379 805 units are 5.8 lower than for the corresponding 11 months last year.

However, new vehicle sales remained surprisingly solid last month despite all the doom and gloom about the poor and troubled economic environment.

Figures released yesterday showed that total new vehicle sales grew by 0.4 percent last month to 51 256 units from the 51 055 vehicles sold in November last year, boosted by a strong heavy-truck market.

Azar Jammine, the chief economist at Econometrix, said the sales figures for last month were reasonable and slightly better than the market might have expected.

Jammine said month-on-month sales were down last month compared to October but were a considerable improvement year on year with sales achieved in November last year although this was partly a statistical phenomenon because the new vehicle market started to weaken in November last year.

“The sales figures are saying the economy is weak but it is not collapsing. It’s just gradually slowing down,” he said.

Jammine said some of the actual figures related to the economy were better than the sentiment indices.

Sales of new cars dropped marginally by 0.6 percent to 33 038 units year on year from November last year, while new light commercial vehicles, bakkie and mini bus sales improved by 1.1 percent to 15 242 units in the same period.

Sales of medium commercial vehicles declined by 3 percent to 1 028 units but heavy and extra-heavy commercial vehicles sales grew by 16.4 percent to 1 948 units.

Rudolf Mahoney, the head of brand and communication at WesBank, said the new vehicles sales figures last month were better than expected in showing positive overall growth of 0.4 percent but described this as “a counter cyclical blip”.

Mahoney believed sales were being driven by pre-emptive buying ahead of vehicle prices increasing by anything between 5 percent and 10 percent between now and January.

Nicholas Nkosi, the head of vehicle asset finance – retail banking at Standard Bank, said consumer sentiment was negative and consumers were holding back on sales because of the serious headwinds facing the economy.

He said the new vehicle market was likely to come under serious pressure next year with a continuation in the decline in passenger vehicle sales.

BUSINESS REPORT

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