Year-on-year (y/y) growth in total South African vehicle sales was 14,5% in May, up 6 671 units to 52 534 units.
This improvement on April’s relatively soft sales figures was driven by an uptick in passenger vehicle sales growth, which picked up to 16,6% in May from April’s 13,9%, nearly 5 000 more new cars sold than the 30 085 units in May
2005.
It is perhaps not too surprising that May’s passenger sales figures are somewhat better than April’s given the weaker performance of the sector in April. This would largely explain the strong month-on-month growth in total sales of 15,2% in May, the strongest recorded in about two years.
The year-to-date sales figures show that sales of passenger vehicles from January-May 2006 are 18,9% higher than the corresponding period last year.
Notwithstanding the slight improvement in May, growth in vehicle sales, particularly passenger vehicles, are not expected to sustain the rampant growth rates that have been seen in the previous year. Analysts do believe however that while growth rates will come down, absolute sales will continue at sustained high levels.
The medium and heavy commercial vehicle markets have experienced high growth in 2006 so far — sales are around 21% higher than January-May 2005. This is evidence of increased fixed investment and infrastructural investment this year, which is set to continue strongly over the medium term. The high growth has however come of a low base, and one should not interpret the slowdown in growth of MCV and HCV sales in May to 11,5% and 16,7%, from April’s 20,7% and 23%, in a negative light.
Absolute volumes remain strong in May at about 2 822 up from April’s 2 382, and even as sales continue to benefit from investment spending we will see growth rates falling for statistical reasons.
The export performance of the sector is another positive aspect on which to report. Despite a growing current account deficit shown in the trade stats last week, vehicle exports continue to benefit from favourable industrial policies. For the period January-April 2006 exporters sold 53 372 units compared with 32 292 for January-April 2005. A weaker rand will likely aid exporters even more in the latter half of the year, boosting sales figures further in what analysts believe will be a record sales year. – I-Net Bridge