Cars travel on a main road in a traffic jam.

Cape Town - Year-on-year local sales of new vehicles dropped by almost seven percent last month and export sales by 19.7 percent.

The National Association of Automobile Manufacturers of SA (Naamsa) said on Monday the sector was set to “experience head winds”.

This would be because of above-inflation new vehicle price increases, a slowdown in the economy and rising interest rates.

In a statement, the association said there were 3874 fewer new vehicles sold in the past month than in January last year.

“January 2014 aggregate new vehicle sales, at 53,025 units, registered a decline of 3874 vehicles, or a fall of 6.8 percent, compared to the 56,899 vehicles sold in January last year,” it said, citing trade and industry department figures.

“New vehicle sales... started the year on a weak note, in line with general industry expectations, with all major sectors recording declines compared to the sales levels of the corresponding month last year.”

Naamsa said it expected the new vehicle trading environment this year to be difficult, with “consolidation in sales numbers at best around levels recorded last year”.

Most major segments had recorded year-on-year declines.

New car sales were down seven percent, light commercials 6.6 percent, heavy trucks 19.5 percent, and extra heavy trucks 6.1 percent.

Moreover, export sales in January were down by almost 20 percent.

“Industry new vehicle exports during January 2014, at 13,960 vehicles, had registered a decline of 3433 units, or a fall of 19.7 percent compared to the 17,393 vehicles exported in January last year.”

However, this was due in large part to “the lack of export sales by Mercedes-Benz SA as the company retooled for the production of the new C-Class”.

Naamsa said of the total reported industry sales of 53,025 vehicles, about 42,881 units, or 80.9 percent, represented dealer sales; 13.5 percent represented sales to the vehicle rental industry; three percent to industry corporate fleets; and 2.6 percent to government.

The new car market had come under pressure in January, “and at 38,008 units reflected a decline of 2857 units, or a fall of seven percent, compared to the 40,865 new cars sold in January last year”.

Domestic sales of industry new light commercial vehicles, bakkies and mini-buses - a total of 13,145 units were sold in January - reflected a decline of 922 units, or a fall of 6.6 percent, compared to the 14,067 light commercial vehicles sold during the corresponding month last year.

“Sales of vehicles in the medium and heavy truck segments of the industry, at 780 units and 1092 units, respectively, had been unchanged, in the case of medium commercial vehicles, and reflected a decline of 95 units, or eight percent, in the case of heavy trucks and buses.” - Sapa