November new passenger car sales figures point to ”slow but improving rates of growth during the new year”, an economist said on Wednesday.
Earlier the National Association of Automobile Manufacturers of South Africa (Naamsa) reported that for November new car sales had come in at 19 317 units reflecting a decline of 790 units or 3,9% compared to the 20 107 new cars sold during November 2008.
Factoring in the above average improvement in reported sales of the AMH/AAD group, aggregate industry new car sales registered a year-on-year gain of 1007 units or an improvement of 4,6%.
RGT Smart economist Neal Bruton said this was the first time since January 2007 that the monthly total new car market had been larger than the corresponding month of the previous year.
Sales were 6,7% down on October 2009, however.
”New passenger car sales in November continued the more positive trend in sales of the past number of months.
”The new passenger car sales cycle now appears to have bottomed out and is currently beginning to reflect some slow growth,” Bruton said.
He said the bottoming out of the new car sales cycle appeared to have coincided with South Africa slowly moving out of recession during the third quarter of 2009 when real seasonally adjusted and annualised gross domestic product growth expanded by 0,9%.
New car sales were also being supported by fewer price hikes.
According to Bruton, the annual rate of growth in new vehicle prices has declined from 14,4% in March to 10,5% in October.
He said the new passenger car market would ”probably” end 2009 about 22% down on 2008.
”The road ahead is likely to be rough … while recovery in coming months will increasingly be supported by declining levels of inflation and the impact of interest rate reductions in 2009 steadily filtering through to the economy, the pace of recovery is likely to be slow and extended.”
Bruton said the economy remained weak.
”Manufacturing, while reflecting some recent improvement, is still down 11,4% on 2008 and retail sales down 5,1%.”
He said households remained heavily indebted and, while posting some improvement during the fourth quarter, both consumer and business confidence remained low supporting the view that economic recovery was likely to be slow and muted.
RGT Smart provides the research and market intelligence for Naamsa as well as a number of vehicle and component manufacturers and dealerships. — Sapa