Car sales lose momentum

2011-08-03 00:00

THE new vehicles market is likely to experience positive growth for the second half of 2011, albeit at a softer level compared with the first half of the year.

The National Association of Automobile Manufacturers of South Africa (Naamsa) figures released yesterday revealed that new vehicle sales increased 10,5% year-on-year to 45 703 units last month, on the back of buoyant sales growth in commercial vehicles.

Naamsa said that the total year-to-date sales for 2011 was 15% up compared with the first seven months of last year, while export sales came in at 25 147 units, 8.1% higher than the July 2010 figure.

Volkswagen SA dominated the market, selling a total of 8 717 units or 19% of the total market, compared with Toyota SA, which sold 7 384 units or 16,1% of the total market.

Chris De Kock, Executive Head of Sales and Marketing at asset financier WesBank told The Witness yesterday that the current levels of growth are positive, adequate and sustainable for the entire industry.

WesBank received 90 846 consumer applications in July 2011, four percent higher than the level recorded in July 2010.

De Kock said that although applications remain steady, the conversion rate from applications to actual purchases has declined as consumers are weary of uncertainty in the economy.

The latest private sector credit extension (PSCE) figures revealed that instalment sales maintained its upward trajectory, recording year-on-year growth of 8,5% in June 2011.

Although new vehicle sales remain positive, households are still reluctant to purchase new vehicles, particularly when compared with actual sales levels recorded in 2007.

The average monthly passenger vehicle sales-level in 2011 is about 31 400 compared with average monthly sales of about 36 100 in 2007.

The growth in passenger vehicle sales in July 2011 was softer — up only 9,7% year on year compared with 17,3% higher year on year in June 2011.

This is a substantial decline in the growth momentum of new car sales and Naamsa said the year-on-year increase “represented the lowest improvement in the past eighteen months.”

The commercial market recorded stronger growth in July 2011. Sales of commercial vehicles grew 12,7% year on year last month, on the back of a strong rise in the sale of extra heavy commercial vehicles.

De Kock said that the growth in commercial sales was driven by sales of extra heavy vehicles such as trucks, on the back of additional mining capacity.

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