New car sales to remain constrained

(iStock)
(iStock)

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.

ZAR/USD
17.00
(-0.37)
ZAR/GBP
21.19
(-0.14)
ZAR/EUR
19.11
(-0.16)
ZAR/AUD
11.80
(-0.48)
ZAR/JPY
0.16
(-0.20)
Gold
1775.63
(+0.03)
Silver
17.99
(+0.45)
Platinum
813.00
(+0.80)
Brent Crude
42.92
(+2.64)
Palladium
1899.00
(+0.66)
All Share
54543.85
(-0.13)
Top 40
50246.86
(-0.13)
Financial 15
10170.70
(-0.43)
Industrial 25
76680.25
(+0.69)
Resource 10
50161.16
(-1.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1564 votes
I am taking a hit, but should be able to recover in the next year
23% - 2031 votes
My finances have been devastated
34% - 3044 votes
It's still too early to know what the full effect will be
25% - 2204 votes
Vote