LUCIA MUTIKANI, Johannesburg | Friday
SOUTH Africa’s new vehicle sales rose 9.9% year-on-year in April but fell almost 30% from the previous month, suggesting the market’s growth was now slowing, manufacturers said on Thursday.
Sales rose to 24 506 units in April compared to 22 308 units in the same period last year. On a month-on-month basis sales were down 29.6% from the 34 826 units recorded in March, largely on reduced trading days and price increases.
Despite the slowdown in April, sales for the first four months are still 14.2% higher than the same period last year and the industry is still expected to show sales growth of between 8 and 10% this year, the National Association of Automobile Manufacturers of South Africa (Naamsa) said.
Trading days were reduced to 20 compared to 23.5 in March. This, together with price increases at the start of April, fears of a possible recession in the United States and continued rand weakness took some edge off the market.
”The latest figures provided signs of a modest slowdown in the rate of growth in the new vehicle sales cycle,” Naamsa said in a statement. It added that recent international and local political issues were dampening market sentiment.
The rand dropped to a record low of 8.20/dollar in April fanning inflation fears and dashing hopes of a cut in domestic prime lending rates in the near term, which manufacturers say is needed to stimulate demand.
Market sentiment was dealt another blow by an investigation into an alleged plot to oust President Thabo Mbeki from within the ruling African National Congress. Renewed unrest in neighbouring Zimbabwe also weighed on market mood.
”Recent international and local political issues are suppressing confidence levels and leading to a softening in the market,” said McCarthy Motor Holdings chairman Brand Pretorius.
However, the industry was still expected to show sales growth of between eight and 10% this year on expected inflows from the government’s privatisation programme, which would support the rand and take pressure off interest rates. – Reuters