Cape Town - The latest data released by the National Automobile Association of SA (Naamsa) on Tuesday, shows the outlook for 2016 in terms of domestic new vehicle sales remained constrained.
According to Investec, vehicle sales decline persisted into February signalling weaker consumption and fixed investment spending.
Naamsa assessed this to be the case given the difficult economic environment and low gross domestic product (GDP) growth prospects, the reality of well above inflation new vehicle price increases and expectations of further interest rate hikes.
Naamsa projects a decline of 9% in volumes terms in passenger vehicle sales in 2016 and a 5% decline in commercial vehicle sales.
Total industry vehicle sales fell 8.1% y/y in February versus the 7.0% y/y decline in January. Both the passenger and commercial vehicle categories registered declines in February, reflecting depressed business and consumer confidence, and likely delays in the implementation of infrastructure projects.
Passenger vehicle sales, which comprise nearly 70% of industry sales, contracted by 6.1% y/y in February, marking the 12th consecutive month of decline. Passenger vehicle sales are often viewed as a leading indicator of household consumption expenditure growth and therefore, point to a further slowdown in spending the coming quarters.
Commercial vehicle sales fell 12.1% y/y in February following a decline of 8.7% y/y in January. This is reflective of low rates of investment, by both private and public sectors, in fixed investment and capacity expansion.