April new vehicle sales down 43,1%

South African new vehicle sales in April 2009 were down 43,1% year-on-year (y/y) compared with a fall of 30,3% y/y in March, figures from the National Association of Automobile Manufacturers of South Africa (Naamsa) on Tuesday showed.

Aggregate new vehicle sales reported through Naamsa were at 24 063 units reflected a massive decline of 18 262 units or 43,1% compared with the 42 325 units sold during the corresponding month last year.

In April 2009 Naamsa reported new car sales at 15 071 units reflecting a decline of 9 033 units or 37,5% compared with the 24 104 new cars sold during April 2008.

Factoring in aggregate vehicle sales reported by the AMH Group, the year on year decline amounted to 43,7%.

The association commented that sales in all segments of the South African new vehicle market, as well as export sales, continued to register sharp declines compared with the corresponding month last year.

In aggregate terms, the year-on-year decline in new vehicle sales was in fact the worst on record.

“In addition to a slowing economy and depressed consumer spending, the main factor contributing to the massive decline was the large number of public holidays that fell during April 2009,” said Naamsa.

Overall, out of the total Naamsa reported industry sales of 24 063 vehicles, 83,1% or 20 001 units represented dealer/retail sales, 4,4% sales to government, 7,5% represented sales to the car rental industry and 5% into industry’s corporate fleets.

Sales of Naamsa new light commercial vehicles, bakkies and minibuses at 7 481 units during April 2009 reflected a substantial decline of 7 364 units or 49,6% compared with the 14 845 units of the corresponding month last year.

Taking account of the light commercial vehicle sales reported by the AMH Group, the year on year decline amounted to 7 880 units or 49,5%, said Naamsa.

Sales of vehicles in the medium and heavy truck segments of the industry had registered substantial falls and the April 2009 sales at 691 units and 820 units, respectively; recorded a massive decline of 586 units or 45,9%, in the case of medium commercials; and 1 279 units or 60,9%, in the case of heavy trucks and buses—compared with the corresponding month last year.

Naamsa said that the continuing weakness in medium and heavy commercial vehicle sales confirmed a downturn in investment spending by the private sector and reflected business confidence under pressure.

The lower sales in the sector also reflected continuing difficulty experienced by truck-operating businesses in obtaining finance, it said.

With one-third of calendar 2009 accounted for, Naamsa said that aggregate industry new vehicle sales at 128 164 units reflected a decline of 36,4% compared with the 201 473 vehicles sold during the corresponding four months last year.

The decline in exports of South African produced motor vehicles had accelerated during April 2009 and at 11 479 vehicles had registered a decline of 11 057 vehicles or 49,1% compared with the 22 536 vehicles exported during April last year.

Naamsa said the slowdown in South Africa’s major export markets (Eurozone, Japan and the United States) was expected to translate into further declines in the number of vehicles exported by the industry during calendar 2009.

The association said that all sectors in the South African automotive value chain continued to experience extremely difficult operating conditions with an increasing number of businesses, particularly in the car parts manufacturing and retail sectors, fighting for survival.

It said the most recent 1% reduction in interest rates and the resultant lower debt servicing costs would bring some relief to hard-pressed consumers and businesses.

Naamsa said that domestic sales of new vehicles were expected to remain under pressure in the short to medium term, however, a revival in consumer expenditure on the back of lower interest rates, together with stimulatory government spending, should start to lend support to the domestic market during the second half of the year.

“Any improvement in industry new vehicle exports would only materialise once the severe current global financial and economic crisis abated and confidence returned to international markets.

More recently, positive signs had emerged in the form of a return of some confidence in international financial markets,” said Naamsa.—I-Net Bridge



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