South African new vehicle sales dropped by 15,1% to 41 813 units in December compared to the same month in 2006, the National Association of Automobile Manufacturers (Naamsa) said on Wednesday.
Including sales from Associated Motor Holdings — total sales were 44 926 vehicles in December.
New vehicle sales during the whole of 2007 fell by 5,2% to 612 707 compared to 2006, after registering four successive record years previously, Naamsa said.
”On a market segment basis, sales during December 2007 reflected a mixed picture with the new car and light commercial vehicle markets showing a year-on-year decline of 19,1% and 10,7% respectively, whilst medium and heavy commercial vehicle markets reflected a year-on-year improvement of 19,5% and 8,1%, respectively, relative to the corresponding month last year,” Naamsa said.
During 2007, the automotive industry was hit by a series of negative events.
These included progressive increases in interest rates, the introduction of the National Credit Legislation during June 2007 which introduced stricter disciplines governing the granting of credit by financial institutions, the e-NaTIS vehicle registration difficulties, and, during the third quarter of 2007, the negative impact of industrial disruption in the component supplier industry.
”These developments had impacted negatively on new vehicle sales, particularly new car sales, during the year,” Naamsa said.
Looking ahead, Naamsa said market sentiment and automotive industry trading conditions would continue to be tested by the high interest-rate environment, record high levels of household debt, rising inflation and volatile and increasingly vulnerable international financial markets.
Both consumers and businesses were likely to face a higher cost base in 2008 which in turn would dampen their ability to spend on new cars.
Naamsa said that 2008 would be ”a more challenging year” for the South African economy with GDP growth expected to moderate to about 4,5%.
Sales of new cars and light commercial vehicles ”were likely to remain under pressure during the first half of 2008,” it said. ‒ Reuters, Sapa