Buyers hit brakes on car sales

Johannesburg - South African vehicle makers sold 52 589 units during February - an improvement of 2 479 units or 4.9% - compared with 50 110 units sold during the same month last year, the National Association of Automobile Manufacturers of South Africa's (Naamsa) sales data showed on Friday.

The vehicle manufacturers representative body commented that new vehicle sales had recorded a mixed performance.

"However, closer analysis of the sales by segment showed that, as expected, the new car market was showing signs of increased pressure, whilst commercial vehicle sales had continued to power ahead," it said.

February 2007 new car sales at 32 319 units reflected a decline of 81 units or 0.25% compared with the 32 400 new cars sold during February 2006.

The sales suggested that consumer demand was adjusting to last years' interest rate rises and recent car price increases, the body said in a statement.

These factors, together with high personal debt levels, were beginning to impact on consumer spending and new car purchasing. In fact, for the first time in just under four years, the comparison of monthly new car sales with the same month of the previous year had turned negative, albeit marginally (0.25%), Naamsa said.

In contrast, on the back of continued high levels of economic activity, sales of new light commercial vehicles, bakkies and minibuses at 17 352 units during February, 2007 reflected an improvement of 1 920 units or 12.4% compared to the 15 432 unit sales of the corresponding month last year.

Supported by strong investment sentiment and infrastructural spending, sales of vehicles in the medium and heavy truck segments of the industry had maintained their strong upward momentum and the February, 2007 sales at 1 245 units and 1 673 units, respectively, have recorded an improvement of 174 units or 16.2%, in the case of medium commercials, and a massive 466 units or 38.6%, in the case of heavy trucks and buses - compared to the corresponding month last year.

February 2007 aggregate new vehicle export sales at 16 737 units had shown an improvement of 2 331 vehicles or 16.2% from the 14 406 vehicles exported during the corresponding month last year.

Further anticipated steady growth in industry production for local and export markets would continue to benefit the South African automotive industry and enhance its overall contribution to the country's gross domestic product, according to Naamsa.

The association said that the industry's performance during 2007 would remain a function of the overall performance of the South African economy, the direction of interest rates and new vehicle pricing.

The recently announced positive, confidence building Budget was expected to support savings, investment and future economic growth and would therefore positively influence new vehicle sales.