/ 9 January 2009

New vehicle sales plummet 27%

South African new vehicle sales continued to decline in December, falling 27,1% compared with December 2007, figures from the National Association of Automobile Manufacturers of South Africa (Naamsa) on Friday showed.

This follows a 28,3% year-on-year decline in November.

Naamsa said that new December vehicle sales, at 32 765 units, declined by 12 162 units, or 27,1%, compared with the 44 927 vehicles sold during the corresponding month the previous year.

It said vehicle sales last month registered sharp declines in every segment compared with same time a year ago, with exception of the small volume bus sector.

The association reported that aggregate 2008 new vehicle sales declined by 123 757 units or 20,3% to 488 951 vehicles compared with the 612 708 units sold during 2007, representing the lowest industry annual sales level since 2004.

New vehicles sales not reported in detail through Naamsa added 44 376 units to the 2008 figures. These comprised 34 198 cars and 10 178 light commercial vehicles.

This effectively translates into a 2008 aggregate South African domestic new vehicle market of 533 327 vehicles — which represents a decline of 21,1%, in aggregate terms, compared with total industry sales of 676 098 units in 2007, Naamsa said.

It added that for 2008 as a whole, new vehicle sales fell sharply on the back of substantially lower new car, light and medium commercial vehicle sales.

New car sales for 2008 were at 294 985 units, down from the 384 431 units for the same time the previous year.

Light commercial vehicle sales at 159 302 units fell 16,7% from 191 218 units sold in December 2007.

Medium commercial vehicles fell to 12 143 units from 15 164 units the previous year.

However, heavy commercial vehicle sales were at 22 521 units, up 2,9% from 21 895 units.

Naamsa noted that the South African automotive industry during 2008 had been confronted with a severe profitability and viability crisis throughout the automotive value chain.

Pressure on automotive dealers and distributors had been particularly intense throughout 2008, resulting in a number of dealer closures.

Looking ahead, Naamsa has projected an improved domestic sales environment during the second half of 2009.

The group said that given the unpredictable and volatile international financial environment, it was difficult to provide a definitive outlook for the year ahead.

Naamsa had examined various scenarios and the projections for domestic sales, export sales and domestic production represented the best estimates available at this stage.

“On balance, 2009 will be another challenging year for the South African automotive industry characterised by expected lower levels of production due to reduced demand in major export markets, modestly lower overall domestic sales, intense competition and continued pressure on margins and industry profitability.

“All stakeholders will have to continue to focus on improving efficiencies in terms of production costs, service delivery and customer fulfilment,” Naamsa said. — I-Net Bridge