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Car sales continue slump

2008-08-04 11:36
Naamsa

New vehicle sales continued to decline in July with the only positive news coming from export sales and the heavy commercial market.

The National Association of Automobile Manufacturers of South Africa (Naamsa) on Monday reported that new car, light commercial and medium commercial vehicle sales had remained under pressure in July.

New vehicle sales reported through Naamsa at 42 438 units, registered a deline of 10 418 units or 19,7%, compared with the 52 856 units sold in the corresponding month last year.

The agency stated that while July was traditionally a strong sales month, the daily sales rate during July 2008 was around the lowest experienced in the last four years.

Reported new car sales in July, at 26 015 units reflected a drop of 19,1% compared with the 32 176 units sold in July 2007. However, this was an increase of 14% over June 2008's figures.

16th consecutive drop

Including new car sales not reported in detail by Associated Motor Holdings, the decline amounted to 7 397 units, or 20,1%. The latest figures mark the sixteenth consecutive month-on-month decline in car sales.

Brand Pretorius chairman of McCarthy Motor Holdings said that considering that sales in July 2007 were abnormally low as a result of banks and dealers still experiencing teething problems following the introduction of the National Credit Act in June that year, the further decline on such a low base is concerning.

“In addition, new vehicle sales are currently artificially stimulated by some of the most aggressive marketing and sales campaigns in recent history. It is a fact that spontaneous demand for new vehicles is considerably lower than what the declared sales figures are reflecting,” noted Pretorius.

The downward spiral continued to the light and medium commercial segments. Sales of LCVs were down 4 042 units (23,5%) compared with 17 206 units sold in July 2007. MCV sales were down 24,1% to 1 058 units. Year-to-date, LCV sales are down 12.4%, and MCV sales 7.7%.

"Declining confidence"

“The decline in business and consumer confidence as well as the slowdown in economic growth, are now having a significantly negative impact on the light and medium commercial segments of the market,” said Pretorius.

“The sharply lower sales over the last quarter provide conclusive evidence that both private and fleet customers have now become very cautious as far as vehicle replacements are concerned.”

However, Heavy trucks and buses recorded a slight increase, with a gain of 6,1%, or 126 units, to 2 201.

Other good news was that vehicle exports set a new monthly record - 28 269 units, an improvement of 85,4% from for 15 247 units exported during July 2007.

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