Cape Town - New vehicle sales in all segments, with the exception of medium commercial vehicles, had deteriorated sharply during April registering double digit declines, the National Association of Automobile Manufacturers of SA (Naamsa) said on Tuesday.
In commenting on the official statistics for new car sales in April, Naamsa said the lower sales could, in large part, be attributed to the proliferation and configuration of public holidays during the month.
In 2017, the Easter holidays fell during the month of April, while in 2016 they fell during the month of March. The multiplicity of public holidays had also impacted on new vehicle exports, which reflected a sharp year-on-year (y/y) decline.
"Following the modest improvement in new vehicle sales experienced during the first three months of 2017, the outlook for the balance of the year had turned negative on the back of the extra-ordinary political events at the end of March, 2017 and early April, 2017. Political and social polarisation in South Africa, together with prospects of lower domestic growth over the short to medium term – continued to weigh on business confidence and consumer sentiment," said Naamsa.
READ: New car sales skid
"Domestic new vehicle sales were closely correlated with the overall performance of South Africa’s economy and confidence levels. The key performance factors driving new vehicle demand included gross domestic product (GDP) growth, the direction of interest rates and the exchange rate."
Naamsa anticipates that greater clarity would come over the next two to three months regarding the impact of socio-political events on the direction of the economy. The association said this would enable it to resume projections on new vehicle sales. At this stage, the risk for new vehicle sales was on the downside, in its view.
"Industry new vehicle exports would remain a function of the performance and direction of global markets. Indications for the global economy were reasonably positive with the latest IMF projections anticipating global growth at around 3.6%. This would benefit vehicle exports to Europe, Australasia, Asia, the United States and South America," said Naamsa.
Naamsa anticipates that export sales would register upward momentum over the balance of 2017, thereby continuing to contribute positively to SA’s trade balance.
April 2017 aggregate new vehicle sales at 34 956 units had decreased by 5 392 units (13.4%) from the 40 348 vehicles sold in April last year. April 2017 export sales at 24 449 had registered a sharp fall of 8 383 vehicles (25.5%) compared to the 32 832 vehicles exported in April last
Overall, out of the total reported industry sales of 34 956 vehicles, an estimated 31 479 units (90.1%) represented dealer sales, 4.3% represented sales to the vehicle rental industry, 3.1% to industry corporate fleets and 2.5% to government.
The April 2017 new car market at 22 452 units reflected a fall of 3 560 cars (13.7%) compared to the 26 012 new cars sold in April last year. The car rental industry had accounted for an estimated 5.2% of new car sales in April 2017.
According to Naamsa, the rental industry’s share was, however, probably understated since it excluded estimates of BMW SA and Mercedes car rental sales.
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 10 592 units during April 2017 reflected a decline of 1 625 units (13.3%) compared to the 12 217 light commercial vehicles sold during the corresponding month last year.
Sales of vehicles in the medium and heavy truck segments of the Industry had also recorded falls and at 562 units and 1 350 units, respectively, reflected a decline of 22 units (3.8%) in the case of medium commercial vehicles and, in the case of heavy trucks and buses, a decline of 185 vehicles (12.1%) compared to the corresponding month last year.
Industry new vehicle exports had been lower than expectations and at 24 449 units exported during April 2017 reflected a reduction of 8 383 units (25.5%) compared to the 32 832 vehicles exported in April last year.Read Fin24's top stories trending on Twitter: Fin24’s top stories