South African new vehicle sales in March 2004 registered the highest year-on-year (y/y) increase at 28,5% since September 1995, when it was 87,9% y/y after strikes in the third quarter of 1994.
Figures released by the National Association of Automobile Manufacturers of South Africa (Naamsa) on Friday show a massive 28,5% y/y rise to 38 891 units from January’s large 16,9% y/y increase to 32 330 units and January’s small 5,5% y/y gain to 33 601 units.
This compares with a y/y growth of 9,1% in December, 11% in November and last year’s peak y/y increase of 14,7% in September.
Overall 2003 sales were 368 454 units, a 5,3% gain, but this was definitely a case of two halves: first-half sales were down 1,1% y/y and second-half sales soared by 11,5% y/y.
The second-half 2003 sales growth was in part due to recent interest rate cuts. The South African Reserve Bank cut by 150 basis points in the middle of June, by a further 100 basis points in the middle of August, 100 basis points in September, a further 150 basis points in October and finished the year with a 50 basis points cut in December. Economists do not expect any further interest-rate cuts this year.
The small y/y gain in January was in part due to lack of supply, as manufacturers had their annual shutdown in parts of December and January. This shutdown also affected exports, which plummeted by 40,7% y/y to only 5 204 units in January, but there was an 80% month-on-month surge to 9 367 units in February.
If the South African vehicle industry aims to meet its export target of about 138 000 this year compared with last year’s 126 661, then it needs to export at the rate of more than 12 000 per month over the rest of this year.
March new car sales rose by 25,9% y/y to 25 079 units for the best March since 1984. In February there was an 18% y/y increase to 21 114 units, but this was 10,7% below January’s sales.
January 2004 new car sales — at 23 651 units — were the highest January total to date and were up 7,3% y/y compared with December’s 12,2% y/y gain.
October new car sales — at 24 172 units — had the highest y/y gain in 2003 at 20,1% y/y after September’s surge of 14,7% y/y compared with August’s 13% y/y rise, July’s 8,6% y/y gain and June’s 4,7% y/y increase. October sales were only 0,6% higher than September’s, but a massive 39,1% more than May’s.
The 2003 new car sales of 247 259 were up 6,8% on 2002 and the highest since 1996, but still well down on record annual sales of 301 528 units achieved in 1981.
Naamsa said improving business sentiment, positive consumer confidence, stable interest rates and, importantly, enhanced overall new vehicle affordability in real terms — as a result of stable new vehicle prices — all provide an environment for further growth in vehicle sales in the months ahead.
Moreover, new car buyers continued to benefit from prevailing highly competitive trading conditions and the availability of a broad range of attractive sales incentives.
Overall, Naamsa believes the short- to medium-term prospects for the industry remain decidedly upbeat. — I-Net Bridge