Business

South African vehicle sales keep growing

4 July 2012

South African new vehicle sales turned in another solid performance in June, growing by 15.6% year-on-year, while vehicle exports grew by 7%, the National Association of Automobile Manufacturers of SA (Naamsa) reports.

"The June new vehicle sales reflected another relatively solid performance with sales in all the major segments registering double digit growth compared to the corresponding month last year," said the association on Tuesday.

June 2012 aggregate industry domestic sales improved by 7 015 units or 15.6% to 51 891 vehicles from 44 876 units in June 2011.

Total domestic sales for the first half of 2012 remained 10.5% ahead of the six months in 2011, while June 2012 export sales at 27 061 vehicles registered modest growth, rising by 1 767 units or 7%.

New model introductions spur buying

Overall, out of the total detailed (disaggregated) reported industry sales of 49 108 vehicles (excluding Mercedes Benz SA), 86.2% or 42 340 units represented dealer sales, 5.9% represented sales to the vehicle rental industry, 4.1% to government and 3.8% to industry corporate fleet sales.

From a seasonal perspective, sales to car rental companies, during the next three months, should improve as the car rental industry started to re-fleet.

"Assisted by new model introductions, aggregate industry new car sales during June, 2012 had remained relatively strong and at 35 918 units (including Mercedes Benz SA) reflected an improvement of 4 480 units or 14.3% compared to the 31 438 new cars sold during June 2011," Naamsa said.

"Year to date new car sales were 11.8% ahead of the corresponding six months of 2011. The daily selling rate during June 2012 remained at five-year high levels."

Mercedes Benz SA provides a single total sales number for passenger cars, commercial vehicles and export sales. Estimates for Mercedes Benz SA were used based on historical sales trends and forecasting techniques.

Sales of industry new light commercial vehicles, bakkies and minibuses, including estimates for Mercedes Benz SA, reflected a strong growth at 13 421 units in June 2012, reflecting an increase of 2 425 units or 22.1% compared to the 10 996 light commercial vehicle sales during June 2011.

Sales of vehicles in the medium and heavy truck segments of the industry, at an estimated 819 and 1 733 units respectively, recorded an increase of 11.7% in the case of medium commercial vehicles, and of 1.4% in the case of heavy trucks and buses, compared to the corresponding month last year.

Exports

Exports of South African produced motor vehicles, including Mercedes Benz SA export sales data, during June 2012 at 27 061 vehicles registered an improvement of 1 767 units or 7% compared to the 25 294 vehicles exported in June last year.

Naamsa said the momentum of industry export sales should improve over the balance of the year as various vehicle export programmes were ramped up.

"Overall, the industry's export performance would remain a function of the direction of the global economy. Vehicle exports into Europe were likely to continue under pressure as a result of the recession in the Eurozone but these could be offset by higher exports to African countries and Australia," it noted.

Though there were indications of further slowing in the domestic economy, new vehicle sales continued to perform remarkably well, with several factors expected to support the domestic market.

These included historically low interest rates, continuing improvement in vehicle affordability in real terms, improving demand for credit by households and businesses, as well as further pre-emptive buying by consumers in response to the weaker exchange rate in recent months.

"In terms of domestic sales, the industry remained on track during 2012 for single digit growth in the range of 8% to 10% over 2011," Naamsa said.

"As far as export sales are concerned, there remained some uncertainty regarding the extent of the potential impact from economic turbulence in Europe and softer growth in other international markets."

Source: SANews.gov.za