Car sales plunge; exports soar
Wed, 03 Dec 2008
New car sales in November were the lowest in five years, the National Association of Automobile Manufacturers of SA (Naamsa) said on Tuesday.
"The latest sales represented the worst monthly new car market in the past five years," said Naamsa.
In November, the sales of new cars dropped by 31.4% compared to the same month last year.
Overall vehicle sales dropped by more than 28%.
"Sales in all segments of the South African new vehicle market had weakened significantly suggesting that conditions in the South African economy had continued to deteriorate rapidly," said Naamsa.
"Aggregate new vehicle sales, reported through Naamsa, at 34 176 units had registered a decline of 13 497 units or 28.3% compared to the 47 673 vehicles sold during the corresponding month last year."
The average sales in the first 11 months of this year were 20.7% lower than the same period last year.
The sales of new light commercial vehicles, bakkies and minibuses declined by 23.2%.
Medium truck sales dropped by 30% and the sales of heavy trucks and buses declined by 20.6%.
"The latest sales data of heavy truck and extra heavy commercial vehicles suggested that despite the major infrastructural investment projects, fixed investment in the South African economy had started to moderate," said Naamsa.
Meanwhile, exports of South African produced motor vehicles increased to a record monthly total of 31 557 export sales.
"On a year to date basis export sales reflected an impressive year on year improvement of 73.1%. Vehicle exports for 2008 as a whole were now projected to reach about 295 000 units."
Naamsa said an improvement in sales was only expected in the second half of next year.
"Even if the monetary authorities implemented reductions in interest rates in the coming months, trading conditions in the domestic market were only expected to show an improvement from the second half of 2009 onwards."
Volkswagen SA sales and marketing director Mike Glendinning predicted that the new car market would drop further in 2009 before showing signs of recovery.
"The market in 2009 could decline by a further 10 to 15% before some consolidation and recovery possibly occurs in the latter half of the year," said Glendinning.
He said as 2008 drew to a close, the new car market could conclude the year with a 24% drop.
Glendinning said Volkswagen SA had captured a 23.3% share of the market in November with 5113 passenger units sold.
Polo Classic sold 2096 units, Citi Golf 1410 and the Audi brand 800 units.
Glendinning said the demand for new passenger cars was affected by a combination of high inflation and interest rates, household financial stress and the global financial crisis.
A deteriorating exchange rate, low gross domestic product growth and vehicle price increases all took their toll.
"The full impact of the global financial crises and steadily emerging, possibly deep, global economic recession (is) yet to fully impact on the South African economy, 2009 - in particular the first half of 2009.
"(This) will undoubtedly present challenging trading conditions in the new passenger car market, despite reductions in interest rates and a drop in inflation," said Glendinning.
Sapa
