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In amplification of the new vehicle sales statistics for the month of June, 2015 – released today for public consumption on the website of the Department of Trade & Industry – the Association commented that the recent trend had continued during the month with domestic new vehicle sales, with the exception of light commercial vehicle sales, registering fairly substantial declines compared to the corresponding month last year. New car sales in particular had registered the largest year-to-date monthly decline in 2015. However, further strong growth in new vehicle exports had again been a welcome feature during the month.

In the event, June 2015 aggregate new vehicle sales at 50 251 units were down 4.8% from the 52 785 vehicles sold in June last year. Overall, out of the total reported Industry sales of 50 251 vehicles, an estimated 42 437 units or 84.5% represented dealer sales, 6.4% represented sales to the vehicle rental industry, 5.9% constituted sales to government and 3.2% to industry corporate fleets.

The June, 2015 new car market at 33 035 units reflected a fairly substantial decline of 2 332 units or a fall of 6.6% compared to the 35 367 new cars sold in June last year. The relatively weak new car market was despite second quarter 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.

Domestic sales of new light commercial vehicles, bakkies and mini buses during June, 2015 at 14 756 units reflected a modest improvement of 223 units or a gain of 1.5% compared to the 14 533 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 substantial declines. Medium commercial vehicle sales at 804 units and heavy commercial vehicle sales at 1 656 units, reflected a fall of 103 units or 11.4% in the case of medium commercials and a decline of 322 vehicles or a fall of 16.3% in the case of heavy trucks and buses - compared to the corresponding month last year.

Vehicle exports reflected upward momentum and continued increasingly to contribute positively to South Africa’s current account of the balance of payments. Industry new vehicle exports at 31 422 units during June, 2015 had again registered impressive growth compared to the corresponding month last year rising by 7 930 vehicles or 33.8% relative to the 23 492 export sales in June, 2014. Vehicle exports for 2015 remained on target to improve, in annual terms, by about 25% 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, had reflected a steady decline in recent months and were expected to remain under pressure over the short to medium term. Subdued levels of economic activity, electricity supply constraints, the impact of the recent higher personal tax burden, substantial increases in petrol price inflation and above inflation new vehicle price increases – all contributed to an unfavourable outlook for domestic new vehicle sales. Business confidence and consumer sentiment, as a result, were also under pressure. However, the slight gain in the Purchasing Managers Index on the back of an improvement in business activity and an improvement in expected business conditions represented positive news.

In contrast to the difficult domestic environment, the continued sharply higher new vehicle export sales would continue to support the industry’s vehicle production levels and South Africa’s balance of payments.

Wednesday, 1st July 2015
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