New vehicle sales in South Africa continued to drop amid tightening financial conditions in September, with latest statistics from the National Association of Automobile Manufacturers of SA (Naamsa) showing a 13% decline in sales for the month compared to the same period in 2006.

"The performance of the new passenger car market in September 2007 continued to slow on the back of softer private demand for passenger cars, but the demand for new commercial vehicles remained fundamentally strong as economic activity levels had continued to benefit from infrastructural led growth and strong investment sentiment," the association said in a statement this week.

Aggregate new vehicle sales reported by Naamsa members stood at above 50 000 units, a decline of just over 7 500 vehicles as compared to the corresponding period last year.

"The year-on-year decline in aggregate sales during the previous month of August 2007 had been 3.1%, while aggregate Naamsa sales for the first nine months of 2007 were 3.2% lower that the record sales of the corresponding period in 2006," Naamsa said.

Passenger car sales for September dropped to about 32 000 units as compared to over 37 000 units in the same period last year, reflecting a decline of 14.1%. Sales declined by a similar percentage compared to August 2007 figures.

"Taking account of new car sales not reported in detail to Naamsa, the September 2007 total new car market had recorded a decline of 12.9% compared to September 2006," Naamsa said.

The association also attributes the drop in new vehicle sales to the strike in the automotive component sector, which led to a loss of two weeks' worth of production for domestic vehicle manufacturers.

The strike also had a negative effect on new vehicle export sales for the month, which plummeted from to some 8 600 units as compared to over 15 000 units in the same period last year - a decline of 43%.

Naamsa notes, however, that vehicle exports had improved in August before the strike, and they expect a return to higher export sales once new export programmes come to fruition during the last quarter of the year.

Source: BuaNews

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