Total new vehicle sales (as reported by NAAMSA today) recorded positive growth in July of 10.5% y/y. Total year to date domestic sales in 2011 remained 15% ahead of the corresponding seven months in 2010. Overall, though, there has been a substantial decline in the growth momentum of vehicle sales, especially new car sales (see presentation link below).
New passenger car sales saw an increase of 9.7% compared to July 2010. There has been a substantial decline in the growth momentum of new car sales and the y/y increase represented the lowest improvement in the past eighteen months. This loss of momentum is more evident when one considers that the demand for new passenger cars was supported strongly in July by car rental companies.
Sales of light commercial vehicles, bakkies and minibuses increased by 10.2% compared to the corresponding month last year. The sale of medium and heavy trucks recorded an increase of 23.6%y/y and 29.5% respectably – a welcome improvement relative to recent data. Exports of South African-produced motor vehicles increased 8.1% in July compared to July last year.
Whilst new vehicle sales remained positive, the industry was adversely affected by lost days of production during the month as a result of strike action in some associated industries. The recent decline in the PMI and the Reserve Banks’ leading indicators suggest a slower pace of expansion over the medium term. The slow growth in private sector credit and higher inflation (especially in administered prices) will most likely have a negative impact on industry performance into the next period.
Laura Jones
Economic Assistant
Download the presentation slides