Domestic sales of new vehicles as well as vehicle exports were up marginally in November.
Industry association Naamsa said today that aggregate new vehicles were sales were up 0.4% year on year. However, new passenger car sales were down more than half a percent.
Overall, out of the total reported Industry sales of 51 256 vehicles, an estimated 85.0% represented dealer sales, 8.1% represented sales to the vehicle rental industry, 3.9% constituted sales to government and 3.0% to industry corporate fleets.
It said consumers’ disposable income and sentiment remained under pressure despite the extremely attractive incentive packages on offer in the industry.
Naamsa said intense competition in the market continued to put pressure on margins throughout the automotive value chain and this trend is expected to continue in the medium term.
Industry exports showed an improvement of 66 units year on year for November.
However, According to Naamsa export numbers had been affected by special circumstances arising from the new Ford Ranger which was at the early stage of its launch phase.
The model run out, model run in of the product had contributed to the relatively low industry export numbers. Industry vehicle exports were expected to show a strong recovery over the next few months. Furthermore, 2015 industry vehicle exports would be at a record level.
Automotive production will be on solid footing on the back of higher new vehicle exports,domestic new car and aggregate commercial vehicle sales were expected to remain under pressure into 2016.
According to Naamsa the sharp decline in the November 2015 Purchasing Managers’ Index reflected an economy under pressure and suggested progressively more difficult underlying economic conditions
Naamsa said that October, 2015 further increase of 0.25% in interest rates would serve to accelerate the current weak trend in the economy. The associated rise in debt servicing costs would also have a negative impact on already low levels of consumer and business confidence. Coupled with the impact of the drought and its inevitable effect on agricultural output and prices, the rising interest rate cycle would make it more difficult for South Africa to reverse the current low growth environment."
NAAMSA therefore anticipated that domestic new vehicle sales would remain under pressure during 2016 and industry projections for next year would be revised downwards.
