Cape Town - September saw new vehicle sales continue declining, according to the latest sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa).
Only 47 399 new vehicles were sold in the past month, representing a decrease of 14.3% compared to the same period in 2015. Year-to-date, total industry sales have fallen 11.3% – close to WesBank’s forecast that the market would shrink 12% in 2016.
Despite September being the end of the quarter, which usually sees attractive deals to aid in meeting targets, new vehicle sales saw a sharp decline. The majority of vehicles in South Africa are sold to consumers through the dealer channel, where sales of passenger vehicles and Light Commercial Vehicles (LCVs) fell 14.4% and 14.8%, respectively. The contraction in the market is attributed to both rising prices for new vehicles as well inflation affecting consumer budgets.
Simphiwe Nghona, CEO of Wesbank's motor division, told Fin24 on Monday that South Africa’s new vehicle sales have remained in decline since the start of 2016, and the market is down 10.8% year-to-date. This has been fuelled by rising new car prices as well as uncertainty and low confidence among both business and consumers.
"However, the rand has clawed back some of its losses and the South African Reserve Bank has lifted its forecast for growth for 2016, from zero per cent to 0.4%. The effect of these factors on the economy will only be seen in the medium term, and until then, the new vehicle industry will continue to rely on vehicle manufacturers using marketing incentives to provide financial assistance to new car buyers," said Nghona.