PRETORIA – New car sales declined last month by 2.6 percent to 32 786 units from 33 678 unit sales in September last year, despite strong sales to the vehicle rental industry.
Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa, said yesterday that the vehicle rental industry had again made a strong contribution to the monthly car sales with an estimated 23.4 percent of sales representing car rental purchases. Total new vehicle sales last month dropped by 1.9 percent year-on-year to 49 670 units, with sales accounting for an estimated 16.5 percent of total sales.
Sales of new light commercial vehicles, bakkies and minibuses declined last month by 1.2 percent to 14 343 units, while sales of medium commercial vehicles improved by 0.4 percent to 702 units and heavy trucks and buses by 4.7 percent to 1 840 units.
Export sales of locally produced vehicles increased last month by 1.2 percent to a record 36 781 vehicles from the 36 341 vehicles exported in September last year.
Azar Jammine, the chief economist at Econometrix, said sales to the vehicle rental industry last month were high, but appeared to be a bit of a catch-up, because sales to the industry had been lagging recently.
Economy not collapsing
Jammine said the overall new vehicle sales figures were fair, because they supported the view that the economy was not collapsing, which was good news, considering the shocking Purchasing Managers’ Index (PMI) data released earlier yesterday.
The index, which was compiled by the Bureau for Economic Research and gauges manufacturing activity, declined to 43.2 points last month and its lowest level in more than four-and-a-half years from 43.4 points in August.
Jammine said many would argue that South Africa’s economy was not going to come out of recession, but the new vehicle sales figures were indicative that the overall economy was on track for marginal positive growth this year. However, Jammine did not expect any major improvement in new vehicle sales this year.
Isaac Matshego, an economist at Nedbank, said the new vehicle market was likely to stabilise in the coming months, but any recovery would be modest. He said the current macroeconomic environment of lower borrowing costs and subdued vehicle price inflation would help to support aggregate sales, but the overall growth rate would be contained by still modest overall demand growth, subdued household income gains, higher taxes and the chronically weak job market.
He said the strong uptrend in fuel prices and the rise in other administered prices had added to the pressures on disposable incomes.
Vermeulen said that with three quarters of the year accounted for, the indications were that annualised sales in all major new vehicle segments would probably register marginal declines compared to last year.