New vehicle sales paint grim picture of economy

2014-06-04 13:11

New vehicle sales data has renewed jitters about the local economy’s seeming descent into recession.

The figures, released on Monday, show substantial declines in all classes of vehicles sold last month.

National Association of Automobile Manufacturers of SA (Naamsa) data show that just over 49 000 vehicles had been sold last month. This is 9.2% less than the 54 000 vehicles sold in the same month last year.

More pronounced declines were observed in the export market, which fell 40.5% compared with the same period last year.

“The decline in first-quarter GDP to negative levels, the dramatic decline in the purchasing managers’ index – particularly the business activity and employment index components – the sharp rise in producer inflation and the worsening trade deficit, all confirmed the advent of a more difficult economic environment,” said Naamsa.

“As a result, the domestic automotive market was likely to continue to face headwinds over the short- to medium-term.”

The association said this was in contrast to international developments, characterised by expanding vehicle sales in China, the US and recovery in Europe – which could come in handy for South African exports of new vehicles during the second half of this year.

One of the few manufacturers to buck the overall downward trend was Mercedes-Benz SA, which sold 2 734 vehicles, almost 200 more than those sold last May.

It was the luxury German car of choice, beating BMW’s 2 003 units in sales, while Porsche sold only 64 units. Italian cars performed poorly with Ferrari selling eight and Maserati just one.

Car lovers attributed the Merc’s success to discounts on sales of the old C-Class to make way for the new model, which will be shipped from next month.

But last month, Mercedes-Benz’s Florian Seidler said the C-Class had always been a trendsetter in the mid-size luxury segment.

“This is also true for the new C-Class as it comes with qualities usually reserved for higher-class vehicles – environmentally responsible, technologically advanced and high levels of comfort and driving enjoyment.”

Some of these cars are manufactured at a plant in East London, which Naamsa expects will contribute to the recovery of export sales in the second half of the year.

The outlook for local sales remains dire. “At this stage, Naamsa anticipates that the domestic market in 2014 is likely to register a decline, in aggregate terms, of between 3.5% and 5.0% compared with 2013.”

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