NAAMSA MEDIA RELEASE :COMMENT ON THE JULY 2015 NEW VEHICLE SALES STATISTICS
In amplification of the new vehicle sales statistics for the month of July, 2015 – released today for public consumption on the website of the Department of Trade & Industry – the Association commented that the slow-down in domestic new vehicle sales had continued during the month with new car and heavy truck sales registering substantial declines compared to the corresponding month last year. New car sales registered the largest year-to-date monthly decline. In contrast, export sales of new motor vehicles had continued to record strong year on year gains.
July 2015 aggregate new vehicle sales at 54 112 units were down 6.1% from the 57 636 vehicles sold in July last year. Overall, out of the total reported Industry sales of 54 112 vehicles, an estimated 44 564 units or 82.4% represented dealer sales, 11.1% represented sales to the vehicle rental industry, 3.4% to industry corporate fleets and 3.1% constituted sales to government.
Sales of new cars in the consumer driven new car market at 36 506 units reflected a substantial decline of 3 509 units or a fall of 8.8% compared to the 40 015 new cars sold in July last year. The slowing new car market was despite attractive incentive packages on offer by most automotive companies. Intense competition in an increasingly difficult trading environment continued to put pressure on margins throughout the automotive value chain. Slower economic growth and the recent 0.25% increase in interest rates were expected to put further pressure on sales of new cars over the balance of the year. A positive feature was the contribution of the car rental sector with more than 1 in 6 cars sold being purchased by car rental companies.
Domestic sales of new light commercial vehicles, bakkies and mini buses during July, 2015 at 15 090 units reflected a marginal improvement of 111 units or a gain of 0.7% compared to the 14 979 light commercial vehicles sold during the corresponding month last year.
Sales of vehicles in the investment-driven medium and heavy truck segments of the Industry had also registered declines. Medium commercial vehicle sales at 841 units and heavy commercial vehicle sales at 1 675 units, reflected a fall of 14 units or 1.6% in the case of medium commercials and a decline of 112 vehicles or a fall of 6.3% in the case of heavy trucks and buses - compared to the corresponding month last year.
Vehicle exports continued to reflect upward momentum and were increasingly contributing positively to South Africa’s current account of the balance of payments. Industry new vehicle exports at 28 291 units during July, 2015 had registered impressive growth compared to the corresponding month last year rising by 5 555 vehicles or 24.4% compared to the 22 736 export sales in July, 2014. Vehicle exports for 2015 remained on target to improve, in annual terms, by about 20% to a projected industry record export number of about 330 000 for the year.
The underlying trend in new car sales as well as commercial vehicle sales reflected a steady, gradual decline in recent months and was expected to remain under pressure over the short to medium term. Subdued levels of economic activity, electricity supply constraints, the impact of higher personal taxation, petrol price inflation, new vehicle price increases and higher interest rates – all continued to contribute to a deteriorating outlook for domestic new vehicle sales. Business confidence and consumer sentiment were also under pressure.
In contrast to the challenging domestic trading environment, automotive industry vehicle production remained on a firm footing and the sharply higher new vehicle export sales would continue to support the industry’s vehicle production levels and South Africa’s balance of payments.
NAAMSA OFFICES: PRETORIA
Monday, 3rd August 2015