Mboniso Sigonyela
Passenger vehicle sales for May are down in line with other indicators of consumer demand, but vehicle manufacturers should not lose hope as exports and commercial vehicles sales are increasing.
The gains in commercial sales show that fixed investment is recovering while weakness of the rand, particularly against the pound, makes vehicle exports attractive. Britain is the largest importer of South African vehicles.
Sales during the month dropped 4% on last year to 18 356. The National Association of Automobile Manufacturers of South Africa says this is the first negative year-on-year comparison in 22 months. It blames pressure on disposable income for the decline,which follows poor gross domestic product figures for the first quarter.
It was inevitable that car sales would start levelling off after rocketing at the start of the year, says Econometrix’s Tony Twine.
But vehicle finance house Wesbank says the decline should be viewed in the light of May last year being an exceptionally good month.
Light commercial vehicle sales were up 3%, while sales of medium and heavy trucks were up 8,5% and 19% respectively. Absa economists are less positive on the implications of the rise. “… The rise could be due to regular replacement of fleets and not necessarily an increase in investment,” the bank says.
Exports for the first four months of the year are up 50% on last year.