Golf is Volkswagen's biggest seller with more than 950 000 delivered worldwide in 2017. Shown is the flagship GTI variant. File photo: Vokswagen
JOHANNESBURG - The National Association of Automobile Manufacturers of South Africa (Naamsa) yesterday reported a 1.8% improvement in domestic vehicle sales in 2017, signalling year-on-year growth for the first time in four years.

The industry body said 10 039 more units were sold in 2017, resulting total sales of 557 586 units, compared with 547 547 in last year.

Naamsa attributed the growth to the strong contribution by the car rental sector, which accounted for about 16percent of new car sales during the year, as well as sales incentives by manufacturers and importers, particularly during the second half of 2017.

“The improvement, due to modest gains in new car and light commercial vehicle sales, was encouraging given subdued economic growth, pressure on consumers’ disposable income and low levels of consumer and business confidence. The marginal decline in interest rates in July 2017 had a positive effect,” Naamsa said.

Vehicle exports in 2017, at 329 053 units, were down from the 344 820 units exported in 2016 - a fall of 4.6%.

Naamsa said it expected a further modest improvement in domestic new vehicle sales in 2018 and further growth in vehicle exports.

“Taking into account the time effect of various new model introductions, the new car market should improve during 2018 by around 2percent and the light commercial vehicle market by double that percentage,” Naamsa said.

Increase expected

“Factoring in the expected improvement in exports, domestic production of motor vehicles in South Africa was expected to show an increase from 588 000 vehicles produced in 2017 to close on 635 000 vehicles in 2018 - an improvement in vehicle production of about 8%. This figure could prove conservative if vehicle exports expand more than currently anticipated,” it said.

Naamsa, however, said that domestic new vehicle sales ended 2017 on a weak note, with aggregate sales of 40636 units in December, a decline of 1008 units compared with total new vehicle sales of 41644 units in December 2016.

-BUSINESS REPORT