CHRISTIAN FIGENSCHOU, Johannesburg | Thursday 5.00PM.
LATEST new vehicle sales figures released by the National Association of Automobile Manufacturers show that sales of new passenger cars slumped in August to the lowest level this year. The only good news came in the heavy commercial sector, where sales held their own in spite of declining business confidence.
Some 16292 new passenger cars were sold in August — 22,7% down on the previous month’s 21084 units and also 21,1% down on last August’s 20659 units.
Light commercial vehicle sales also declined, with 8156 units sold in August. This was 16,2% down on July’s 9627 units and 7% fewer vehicles sold than the 8770 units moved last August.
The medium commercial sector reflected a similar drop, with August’s 415 units some 15,9% down on July’s 482 units and 16,4% down on the 496 units sold last August.
Only heavy commercials offered a positive sign, with the 628 units sold virtually unchanged against last August and some 6,3% up on July’s sales.
The latest poor sales figures come against the background of high interest rates and market uncertainty. Volkswagen SA’s marketing director Graham Hardy said the motor industry is already experiencing one of the longest cyclical downturns on record, with declining real disposable income, low levels of savings, high levels of household debt and falling business confidence in circumstances where interest rates are already at levels not seen since the mid-1980s. He added that the most recent increase in interest rates has further slowed demand.
Total industry sales so far this year, at 222489 vehicles, is significantly down on last year’s sales of 251801 over the same period. Only exports continue to do well, with a total of 14403 locally built vehicles exported in the first seven months of this year, against only 8689 over the same period last year.
Said Hardy: “The low levels of August sales could lead to further reductions in the full year outlook for 1998 vehicle sales, with export markets representing a window of opportunity for the industry.”
More bad news is that recent further declines in the value of the rand will put additional upward pressure on new vehicle prices, with consequent negative effects on sales. Many car makers are expecting to increase prices again in October.