South African new vehicle sales plunged 30,1% to 38 143 units year-on-year in October as deteriorating consumer confidence and price increases add to the strain of higher interest rates.
The National Association of Automobile Manufacturers (Naamsa) said sales fell from 54 569 units in the same month last year and edged down from 40 955 in September.
Including sales from Associated Motor Holdings — which reports separately to Naamsa — total sales fell 31,2% year-on-year to 41 336 vehicles.
Naamsa said in a statement that higher-than-average new vehicle price increases and deteriorating consumer confidence due to a global financial crisis weighed on a market already under pressure from higher interest rates.
”Despite the fact that October normally represented a seasonally reasonably strong month, growth in all sectors of the industry had deteriorated significantly,” it said.
Global market turmoil and an expected recession are likely to slow economic growth in Africa’s biggest economy, while higher interest rates have led to a sharp easing in consumer spending.
The central bank lifted its repo rate by five percentage points to 12% between June 2006 and June 2008.
The motor manufacturing industry is one of the most important for job creation but the sector has been among the most visible victims of the rate hikes, with new vehicle sales now falling for one-and-a-half years.
Sales for the first 10 months of the year are running 19% lower than the same period in 2007.
But Naamsa said exports remained strong, jumping 62,8% year-on-year to 28 041 units, thanks to efforts to position the country for exports.
”The only source of encouragement during October 2008 revolved around the industry’s new vehicle exports, which had maintained strong upward momentum.” — Reuters