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MOTORING: Vehicle Sales Continue to Hold Up

 





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In amplification of the new vehicle sales statistics for the month of June, 2014 – the Association commented that domestic new vehicle sales had shown some resilience despite the South African economy continuing to experience pressures in the form of slower economic growth, high levels of industrial action, rising inflationary pressures and exchange rate vulnerability. The domestic market was expected to continue to face head winds over the short to medium term in sharp contrast to developments internationally which were characterised by expanding vehicle sales in China, the United States and Europe. However, continued improvement in global economic conditions would benefit SA vehicle exports during the second half of 2014 and in 2015.

In the event, June 2014 aggregate new vehicle sales at 52 837 vehicles had registered a modest decline of 1 251 vehicles or a fall of 2.3% compared to the 54 088 vehicles sold in June last year. The June, 2014 export sales total at 24 024 units reflected a marginal decline of 195 vehicles or a fall of 0.8% compared to the 24 219 vehicles exported in June last year.

Overall, out of the total (disaggregated) reported Industry sales of 52 837 vehicles, 83.8% represented dealer sales, 8.3% represented sales to the vehicle rental Industry, 4.4% to Industry corporate fleets and 3.5% to government.

The new car market had remained under pressure during June, 2014 and at 35 355 units reflected a decline of 2 017 units or a fall of 5.4% compared to the 37 372 new cars sold in June last year.

Domestic sales of new light commercial vehicles, bakkies and mini buses at 14 556 units during June, 2014 had shown some recovery and reflected an increase of 621 units or 4.5% compared to the 13 935 light commercial vehicles sold during the corresponding month last year.

Compared to the corresponding month last year, sales of vehicles in the medium and heavy truck segments of the Industry at 942 units and 1 984 units, respectively, reflected a mixed performance with medium commercial vehicle sales showing a decline of 109 units or 10.4%, whilst heavy trucks and buses had registered an improvement of 254 units or a strong gain of 14.7%.

Industry new vehicle exports during June, 2014 at 24 024 vehicles had registered a marginal decline of 195 units or a fall of 0.8% compared to the 24 219 vehicles exported in June last year. During the second half of 2014, the momentum of Industry vehicle exports was expected to improve significantly.

South Africa urgently needed stronger growth, faster employment creation and a narrowing of the current account and fiscal deficits. The restoration of and improvement in domestic and foreign investor confidence represented a necessary pre-condition in this regard.

The current strike in the steel and engineering Industry was most unfortunate in that it would further undermine investment sentiment and, if prolonged, would increase the risk of the South African economy moving into recession. The impact on vehicle production and exports would start to be felt if the industrial action continued beyond two weeks.

The outlook for the automotive sector for the balance of 2014 was mixed. Domestic sales would continue to be affected by general economic conditions, exchange rate induced new vehicle price increases and upward pressure on interest rates. The domestic market was likely to register a decline, in volume terms, of around 5.0% compared to 2013 with the main impact in the new car and light commercial vehicle sectors. The heavy and extra heavy truck markets were expected to continue to hold up well. In the case of exports, further improvement was anticipated during the second half of 2014 on the back of better global economic growth.


 
 
 
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