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"The latest domestic sales figures, particularly new car and light commercial vehicle sales, have been disappointing," reports the National Association of Automobile Manufacturers of South Africa (Naamsa) following the results of August 2018 new car sales.
New vehicle sales at 47 964 units show a decline of 1234 vehicles (-2.5%) compared to the 49 198 cars sold in August 2017.
Export sales recorded a welcome improvement; total export sales at 32 247 vehicles reflects an improvement of 2317 units (7.7%) compared to the 29 930 vehicles exported in August last year.
Decline all-round
Overall, out of the total reported sales of 47 964 vehicles, an estimated 38 795 units or 80.9% represented dealer sales, an estimated 12.5% represented sales to the vehicle rental Industry, 3.7% to industry corporate fleets and 2.9% to the government.
The SA new car market at 31 447 units registered a decline of 722 cars (-2.2%) compared to the 32 169 new cars sold in August 2017. Naamsa said: "On the back of continued fleeting replenishment, the car rental industry contributed an estimated 17% of new car sales during the month."
Sales of new light commercial vehicles (LCV), bakkies and mini buses declined during August 2018; the market registered 13 956 units, a decline of 866 units or 5.8% compared to the 14 822 LCVs sold during the corresponding month last year.
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Poor Rand
Naamsa comments: "The current socio-political discourse in South Africa was not conducive to uplifting business confidence and investment sentiment, both of which were critical to an improvement in South Africa’s economic performance. Sustainable economic growth was essential to support the creation of new employment opportunities. Urgent steps were needed to address South Africa’s structural problems including skills shortages, general productivity, de-industrialisation and low fixed investment growth.
"The recent sharp depreciation of the Rand exchange rate would exert upward pressure on general inflation, as well as on new vehicle prices. The sharp decline in the latest Purchasing Managers’ Index was a source of concern and suggested a continuation of challenging business and trading conditions during the months ahead.
"As a result, conditions in the domestic new vehicle market were expected to remain under pressure over the short to medium term. Vehicle exports remained a function of the direction of the global economy. Rising protectionism internationally and trade disputes had contributed to uncertainty and could result in lower global growth going forward and higher inflation. Naamsa recently revised downwards the 2018 industry vehicle export projections to 340 000 – a decline of 7.0% from the previous projection of 366 000.
"However, on the back of fairly strong order books, vehicle exports should improve over the balance of 2018 and reflect strong upward momentum in 2019, 2020 and subsequent years. The expectation of export sales for 2019 was currently 384 000 export units."
