NAAMSA MEDIA RELEASE :COMMENT ON THE AUGUST 2016 NEW VEHICLE SALES STATISTICS
NAAMSA COMMENT ON THE AUGUST, 2016 SOUTH AFRICAN NEW VEHICLE SALES STATISTICS – FOR IMMEDIATE RELEASE
Commenting on the new vehicle sales statistics for the month of August, 2016 – released today for public consumption on the website of the Department of Trade & Industry – the Association said that whilst new car sales had registered a further substantial fall, new light commercial vehicle and heavy truck sales had held up relatively well.
Largely attributable to ongoing weakness in the new car market, August 2016 aggregate new vehicle sales at 46 146 units had registered a fairly substantial decline of 4 839 vehicles or a fall of 9.5% compared to the 50 985 vehicles sold in August last year. Aggregate industry export sales at 35 620 vehicles for August, 2016 reflected, as expected, a massive improvement of 7 508 vehicles or an increase of 26.7% compared to the 28 112 vehicles exported in August last year.
Overall, out of the total reported Industry sales of 46 146 vehicles, an estimated 37 345 units or 80.9% represented dealer sales, 15.0% represented sales to the vehicle rental industry, 3.1% represented industry corporate fleet sales and 0.9% sales to government.
The consumer driven new car market had continued to experience severe pressure during August, 2016 and at 30 356 units reflected a decline of 4 567 cars or a fall of 13.1% compared to the 34 923 new cars sold in August last year. This was again despite a strong contribution by the car rental industry which had accounted for 21.6% of new cars sold during the month. Margins at auto industry retail/dealer level remained under significant pressure.
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 13 542 units during August, 2016 had held up relatively well and only reflected a decline of 140 units or a fall of 1.0% compared to the 13 682 light commercial vehicles sold during the corresponding month last year.
Sales of vehicles in the medium and heavy truck segments of the Industry at 759 units and 1 489 units, respectively, reflected a mixed picture and, in the case of medium commercial vehicles, had registered a decline of 123 units or 13.9% and, whilst, in the case of heavy trucks and buses, a marginal decline of 9 vehicles or a fall of 0.6% compared to the corresponding month last year.
As anticipated for some time, industry new vehicle exports during August, 2016 had registered a massive improvement of 7 508 vehicles or an increase of 26.7% compared to the 28 112 vehicles exported in August last year to reach a monthly record figure for 2016 of 35 620 units. The momentum of new vehicle exports was anticipated to improve further over the balance of 2016. For the year and into 2017, new vehicle exports should contribute positively to South Africa’s current account of the balance of payments reinforced by lower vehicle imports on the back of declines in the domestic market.
Domestically, the short to medium term outlook was one of low economic growth and further pressure on consumers’ disposable income. Double digit new vehicle price increases, as a result of exchange rate weakness and vehicle production inflation of 14.8% for the first seven months of 2016, relatively high interest rates, low levels of consumer and business confidence – would combine to further pressurize sales of new motor vehicles, particularly new cars.
The lower levels of new vehicle sales represented a reflection of current difficult economic conditions in South Africa. The fairly substantial decline in the latest Purchasing Managers’ Index did not augur well for short to medium term prospects. In contrast, however, the Reserve Bank leading indicator for 2016 provided some grounds for optimism of a possible future turnaround in economic activity levels.
The SA automotive industry, in particular, remained exposed to exchange rate weakness and current low confidence levels. NAAMSA believed that the public and private sectors had a responsibility to calm current tensions in South Africa and to restore confidence through renewed commitment to sound macro-economic policy, continued fiscal discipline and stability.
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Thursday, 1st September 2016