South African car makers are set for another record sales year despite a flood of economic data sealing the case for another interest rate hike this week — the fourth this year.
Some economists believe that South Africa’s monetary authorities will continue hiking interest rates well into the New Year in a bid to force consumers to tighten their purse strings.
“The market is expected to end the year on a high note, as good sales are anticipated in December,” says Brand Pretorius, chairperson of McCarthy Motor Holdings.
The latest figures from the National Association Of Automobile Manufacturers (Naamsa) show that new vehicles sales rose by 9,6% year-on-year in November to 55Â 378 but slowed by 4,2% month-on-month as consumers begin to scale back. This brought the total number of new vehicles sold for the first 11 months of the year to 597Â 322 units — up 14,1% compared with the first 11 months of 2005.
“Stock availability has improved and many attractive offers are enticing customers to buy now. Some pre-price increase buying is also evident, as there is an expectation in the market that there might be new vehicle price increases on January 1, following the significant depreciation in the value of the rand over the last few months,” Pretorius said.
Volkswagen South Africa’s sales and marketing director Mike Glendinning says despite the slowdown in momentum currently affecting demand for new passenger cars, which will in all likelihood continue in coming months, the industry is headed for another best year.
“There is no doubt that 2006 will yield another all-time record high number of new passenger-car sales in South Africa, creating a sound base for ongoing buoyant levels of demand in 2007, driven by circumstances that look set to continue generating high rates of economic growth,” he says.
Roel de Vries, marketing and sales director of Nissan South Africa, says while this year will once again show record sales growth, 2007 will see increased sales in the commercial-vehicle sector ahead of the Fifa 2010 Soccer World Cup.
“With major infrastructural development ahead as the country prepares for the 2010 football tournament, we expect commercial-vehicle sales to remain a strong player in 2007,” he adds.
Ford Motor Company of Southern Africa is also optimistic about the remainder of 2006.
“Though there has been a marked levelling off in sales, the industry is still heading for a strong year-to-date performance, which should see 2006 represent a record year for the industry for the third year in succession,” comments Jacques Brent, general manager for Mazda South Africa. — I-Net Bridge