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The National Association of Automobile Manufacturers says new vehicle sales in May registered a substantial decline.
As Naamsa warned of the risks of recession given gloomy GDP data, it says aggregate new vehicle sales dropped by 9.2%, with all other categories also registering year on year declines.
"...May 2014 aggregate new vehicle sales at 49 465 units had registered a substantial decline of 5 025 vehicles or a fall of 9.2% compared to the 54 490 vehicles sold in May last year," Naamsa said in a statement.
It also says the new passenger car market also remained under pressure during May and "and at 32 984 units reflected a decline of 4 207 units or a fall of 11.3% compared to the 37 191 new cars sold in May last year. "
Naamsa says vehicle exports in May also industry new vehicle exports registered a sharp decline and was down 40.5% compared to vehicles exported in May last year.
However, it says when Mercedes Benz begins exporting the new C-Class from East London, export figures are expected to improve.
"With the contribution of Mercedes-Benz C-Class exports commencing July, 2014 onwards, Industry vehicle exports were expected to recover during the second half of 2014 particularly in respect of exports to Asia, Africa and Europe. Vehicle exports should benefit from any further improvement in global economic conditions," Naamsa said.
The industry association says the outlook for the automotive sector for the balance of the year looks increasingly less promising.
"In the case of domestic sales, the challenging macro-economic environment characterised by lower growth, exchange rate induced new vehicle price increases and further upward pressure on interest rates would translate into difficult domestic trading conditions and pressure on margins, particularly in the new car and light commercial vehicle sectors."
"At this stage, NAAMSA anticipated that the domestic market in 2014 was likely to register a decline, in aggregate terms, of between 3.5% and 5.0% compared to 2013."
