Total South African vehicle sales surpassed the 700 000 level for the first time in history during the past year, clocking up a tally of 714 340 including non-reports, but analysts point out that interest rate increases are starting to put a brake on passenger sales.
Growth in domestic vehicle sales fell again in December to 7,7%, after having dropped to 9,7% in November from October’s 14,1%.
The National Association of Automobile Manufacturers of South Africa (Naamsa) reported that sales of new cars increased by 3,7% year-on-year (y/y) in December, moderately higher than the 2,1% y/y growth logged in November.
“While December is a seasonally low sales month, the 7,4% month-on-month (m/m) decline in new car sales nevertheless adds to a string of negative monthly rates, as the momentum of demand for passenger vehicles has been tempered by higher debt-service costs, marginal vehicle price increases, and more stringent monetary policy,” says Standard Bank economist Danelee van Dyk.
Independent economic analysts RLJP add that higher interest rates through the second half of 2006 have clearly put the brakes on passenger car sales, with average y/y growth falling from around 18% in the second quarter of 2006, to about 12% in the third quarter 2006 to roughly 6% in the fourth quarter
2006.
Growth in unit sales volumes was again predominantly accounted for by light commercial vehicles (LCV) sales, which increased by 16,8% y/y to 14 791 vehicles in December.
“The robust growth in sales of LCVs generally points to strong small business activity in the manufacturing and logistics sectors, which in turn may be indicative that consumer spending is generally remaining buoyant. Strong activity in this sector may also be reflecting to some extent improved agricultural activity,” RLJP points out.
Sales of Toyota and Volkswagen together comprised just over half of all passenger vehicles sold in December. The Toyota Corrola/RunX/Verso, the Toyota Yaris, and the VW Polo/Classic together sold 9 553 units in December, about 30% of total passenger vehicles sales. The dominant manufacturers in the LCV market are Ford, General Motors, Nissan, and Toyota, who together account for about 90% of market share.
Growth in heavy commercial vehicles (HCVs) did slow in December, but this trend is largely expected due to base effects, and volumes of HCVs should continue to be healthy on the back of increasing infrastructural investment, conclude the analysts. – I-Net Bridge