South African new-vehicle sales declined by 4,4% year-on-year in April as higher interest rates and rising debt levels curbed spending on passenger cars, but commercial-vehicle sales remained strong.
The National Association of Automobile Manufacturers (Naamsa) said on Thursday the industry sold 43 588 vehicles during the month compared with 45 590 units in April 2006.
Including the sales of the Associated Motor Holdings company — incorporated for the first time in 2007 — total sales were 48 523 units.
Naamsa said sales for the month were affected by a large number of public holidays during April — traditionally a low sales month — as well as extended school holidays and hitches in registering new cars.
But the decline also reflected a slowing in consumer spending following interest-rate increases during 2006.
”It was clear that consumer demand had continued to adjust to last year’s interest-rate rises and recent car-price increases,” it said.
”These factors, together with continued high personal-debt levels, were impacting on consumer spending and new car purchasing.”
The central bank hiked interest rates by two percentage points between June and December last year to curb rising inflationary pressures and high consumer spending.
It left its repo rate at 9% in February and April but warned consumers of rising debt levels and urged them to tighten their purse strings.
Household debt was at a record high of 73,8% of disposable income in the fourth quarter of 2006.
Naamsa said new passenger car sales were sharply down on the same month last year, falling 15,9% to 25 912 units, while commercial vehicle sales continued to climb.
Sales of light commercial vehicles were up 20,8% and heavy trucks sales rose by 17,9% year-on-year reflecting robust economic growth and a buoyant construction industry, bolstered by a huge infrastructure spending drive.
New vehicle exports declined by 10,4% to 13 289 units, extending a trend of lower-than-forecast shipments in 2007, the association said.
Vehicle production is one of the biggest industries within South Africa’s manufacturing sector, which accounts for 17% of gross domestic product, and is considered key to cutting unemployment, officially estimated at 25,5%. — Reuters