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NAAMSA MEDIA RELEASE :COMMENT ON THE SEPTEMBER 2014 NEW VEHICLE SALES STATISTICS
 
In amplification of the new vehicle sales statistics for the month of September, 2014 ‐ released today for public consumption via the website of the Department of Trade & Industry ‐ the Association commented that, following resilience in new vehicle sales over the past few months, the latest industry sales figures reflected a remarkably strong performance with sales in all sectors showing above average increases compared to the corresponding month last year. Export sales had also continued to reflect underlying strength. In the event, domestic new vehicle sales ‐ despite subdued economic growth and pressure on consumers disposable income ‐ for the month of September 2014, in aggregate terms, at 60 854 units reflected a substantial improvement of 6 283 vehicles or a gain of 11.5% compared to the 54 571 vehicles sold in September last year. The September, 2014 export sales at 30 778 units reflected a massive improvement of 22 180 vehicles or a gain of 258% compared to the strike ravaged industry total of 8 598 vehicles exported in September last year.

Overall, out of the total reported Industry sales of 60 854 vehicles, 74.5% represented dealer sales, 17.3% represented sales to the vehicle rental Industry, 4.1% to Industry corporate fleets and 4.1% to government.

Assisted by a record contribution by the car rental industry, which accounted for 23.5% of all new cars sold during the month of September, 2014 ‐ the latest monthly new car market had performed above expectations and at 42 918 units reflected a welcome improvement of 2 997 vehicles or a gain of 7.5% compared to the 39 921 new cars sold in September last year. It was for the first time in 2014 that new car sales had registered year on year growth and the improvement could be attributed to a combination of factors, including, attractive incentive packages, general pre-emptive buying in anticipation of further new vehicle price increases on the back of a weakening Rand, relatively strong corporate purchases, replacement demand and the strong contribution by the car rental sector.

Domestic sales of new light commercial vehicles, bakkies and mini buses at 15 179 units during September, 2014 reflected an improvement of 3 009 units or 24.7% compared to the 12 170 light commercial vehicles sold during the corresponding month last year. Pre-emptive purchasing to avoid further expected price increases together with relatively strong corporate demand ‐ had contributed to the improvement.

Compared to the corresponding month last year, sales of vehicles in the medium and heavy truck segments of the Industry at 904 units and 1 853 units, respectively, reflected a modest improvement in medium commercial vehicle sales of 9 units or 1.0% whilst heavy trucks and buses had continued to perform well showing an improvement of 268 units or 16.9%. The strength in heavy truck sales was encouraging and suggested improved investment sentiment.

Year on year comparisons should take account of the fact that new vehicle exports in September last year had been severely depressed as a result of the prolonged strike action, at the time, in the vehicle and component manufacturing industries. In the event, industry new vehicle exports during September, 2014 at 30 778 vehicles registered a massive improvement of 22 180 vehicles or a gain of 258% compared to the artificially low 8 598 vehicles exported in September last year.

Whilst the improvement in underlying domestic new vehicle sales and export sales was encouraging, it was advisable to retain a cautious position regarding the outlook for the automotive sector for the balance of 2014. Lower economic growth, recent increases in interest rates, the possibility of a further interest rate hike before year end and above inflation new vehicle price rises ‐ would combine to ensure that the new vehicle sales trading environment would remain difficult. The domestic market was expected to register a decline, in volume terms, of between 4% and 5% compared to 2013.

Against the background of current normalised industry vehicle production volumes, further improvement in export numbers was anticipated over the remainder of 2014 and through 2015.

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Wednesday, 1st October 2014
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