New vehicle sales shrugged off subdued confidence levels in April with more than 266 more cars bought compared to the prior period last year. File Photo: IOL
JOHANNESBURG – New vehicle sales shrugged off subdued confidence levels in April with more than 266 more cars bought compared to the prior period last year.

The National Association of Automobile Manufacturers' Association of South Africa (Naamsa) said that the sales rose on the back of exports which improved with 11 571 more vehicles shipped offshore compared to the 21 519 last year.

Naamsa said a total of 36 794 were sold in South Africa while 33 090 were exported to international markets.

Naamsa executive director Mike Mabasa said household disposable income contributed to subdued sales with rising costs and lower domestic and global economic growth forecasts continuing to signal a moderation in new vehicle sales.

“However, constructive political and economic reforms after the country's general election on May 8, 2019 could see an improved second half performance in terms of new vehicle sales,” Mabasa said.

“The upward momentum on exports remains strong and industry vehicle production levels would continue to benefit from strong vehicle export sales.”

South African consumers have seen their disposable income come under pressure from a surge in fuel prices since January and a rise in administered prices.

Household spending has also fallen due to elevated rates of unemployment, pressure on real wage growth from higher taxes and tariffs and a deterioration in growth in net wealth.

FNB and the University of Stellenbosch’s Bureau for Economic Research said last month the prospects for consumers looked bleak in the coming months with the measurement of consumer confidence recording its lowest level in the first three months of this year since the last quarter of 2017.

The data showed that confidence among consumers who earned more than R14 000 a month plummeted from 13 points to 3 points in the period under review, while sentiment among those who earned between R3 000 and R14 000 a month decreased by 9 index points.

TransUnion SA said its latest Vehicle Pricing Index shows that vehicle sales fell for the seventh consecutive quarter in the first three months of this year as the effects of fuel hikes and the depressed economy took their toll on beleaguered consumers.

Kriben Reddy, head of TransUnion Auto, said while domestic sales were progressively dropping, exports remained on the rise.

BUSINESS REPORT