LUCIA MUTIKANI, Johannesburg | Tuesday 12.00pm.
NEW vehicle sales accelerated nearly 19% in May as fixed investment levels improved, but manufacturers warn that an ailing rand and political turmoil in Zimbabwe could erode confidence.
The National Association of Automobile Manufacturers of South Africa said in a statement on Monday that vehicle sales rose to 29292 units in May from 24657 units during the same period last year.
On a monthly basis, sales were up 31,3% from 22308 units in April when they were weighed down by a weakening rand and jitters over a possible spill over of the Zimbabwean land crisis.
”Exchange rate weakness is likely to result in [high prices] over the year and the delicately poised socio-political situation in Zimbabwe could also impact adversely on confidence levels,” said Naamsa.
New vehicle prices were initially expected not to exceed 10% in 2000, but retailers and industry analysts now forecast increases of more than 12% due to the continued weakness in the rand.
The rand has maintained a gentle recovery from a record low of R7,20 against the dollar, breached on May 20 and is trading at around R6,92 to the US unit.
May sales were boosted by improvement in fixed investment activity and increased private consumption expenditure on the back of prevailing low interest rates.
”While the rand recovered to some extent…it remains under pressure and its reduced value will filter through to vehicle prices shortly,” said Toyota South Africa marketing director Johan van Zyl.
Manufacturers believe further vehicle price increases can be averted if the rand maintains its recovery. — Reuters