No relief for car manufacturers

February held no relief for embattled new vehicle manufacturers, sales statistics released by the National Association of Automobile Manufacturers of South Africa (Naamsa) on Tuesday showed.

“Sales in all segments of the South African new vehicle market, as well as export sales registered further sharp declines compared to the corresponding month last year,” Naamsa said in a statement.

Aggregate new vehicle sales reported through Naamsa at 29 471 units registered a massive decline of 16 814 units or 36,3% compared to the 46 285 units sold during February 2007.

Overall, out of the total Naamsa reported industry sales of 29 471 vehicles, 82,5% or 24 311 units represented dealer/retail sales, 6,0% were sales to government, 4,7% represented sales to the car rental industry and 6,8% were to industry’s corporate fleets.

New car sales for February at 18 156 units reflected a decline of 9 384 units or 34,1% compared to the 27 540 new cars sold during February 2008.

Factoring in aggregate new car sales reported by the AMH Group, the year-on-year decline amounted to 10 207 units or a fall of 33,3% and represented the worst February new car sales in the past six years.

Sales of Naamsa new light commercial vehicles, bakkies and minibuses at 9 273 units during February 2009 reflected a decline of 6 263 units or 40,3% compared to the 15 536 units of the corresponding month last year.

Taking account of the light commercial vehicle sales reported by the AMH Group, the year-on-year decline amounted to 6 620 units or 39,6%.

Naamsa said sales of vehicles in the medium and heavy truck segments of the industry also registered substantial falls.

Medium truck sales of 893 units showed a decline of 358 units or 28,5% compared to last year.

Heavy truck sales of 1 144 units showed a decline of 809 units or 41,4% from February last year.

For the first two months of 2009, aggregate new vehicle sales declined by 37 155 vehicles or 36,2% from 102 684 vehicles sold during the first two months of 2008 to 65 529 in 2009.

Naamsa said exports of South African-produced motor cars during February 2009 at 14 949 vehicles registered a decline of 5 668 units or 27,5% compared to the 20 617 vehicles exported during February last year.

The sharp slowdown in South Africa’s major export markets [Eurozone, Japan and the United States] would translate into further declines in the number of vehicles exported by the industry during 2009, Naamsa said.

“Current industry projections suggest that overall industry export sales could decline by as much as 35% from last year’s record level of 284 211 vehicles.”

The decline in the domestic sales volumes and export sales reflected the impact of low levels of domestic demand and business confidence and depressed foreign demand associated with the global recession.

“The sharp decline in consumer and business spending on new vehicles in South Africa is a reflection of the high interest rate environment compounded by the inability of many customers currently to obtain vehicle finance,” Naamsa said.

Any improvement in the domestic environment remained dependent on a revival of consumer expenditure, aggressive interest rate reductions and fiscal stimulation.

“A number of developments should ultimately assist in lending support to the domestic market and these include expectations of lower levels of inflation in coming months and substantially lower rates of interest, together with stimulatory government spending,” Naamsa said.

In this context, the recently announced National Budget should lend support to the economy for the balance of 2009, it added.

While domestic sales of new vehicles were expected to remain under pressure in the short term, some improvement should materialise during the second half of 2009, Naamsa said.

“Any improvement in international trading conditions and new vehicle export sales will only materialise once the severe current global economic and financial crisis abates.

“Given the magnitude and seriousness of the global economic crisis, it was anticipated that any recovery would only eventuate in 2010 or 2011.”—Sapa

Client Media Releases

Fempreneurs shine during EWP gala event
Might as well face it