Naamsa: Buoyant December bodes well for new year

Naamsa has released aggregate industry new vehicle sales figures for December 2011 which, despite the absence of recorded figures for Mercedes-Benz, showed a relatively bouyant end to the year for the industry.

The omission of figures for Mercedes-Benz SA (Pty) Ltd stems from a global Directive by Daimler AG that, from the middle of December last year, the company is temporarily required to discontinue participation in the South African Automotive Industry’s domestic new vehicle sales and export sales reporting for the time being. This precautionary move is a result of the European Union Competition Commission investigation into alleged anti-competitive practices by various European Truck Manufacturers - both Naamsa and Mercedes-Benz SA (Pty) Ltd have voiced their desire to re-estabish reporting as soon as possible.

Despite the omission of Mercedes-Benz vehicles sales reports during December 2011, the year ended with aggregate industry new vehicle sales at 43 790 units recording an improvement of 4 335 vehicles or a gain of 11 per cent compared to the total new vehicle sales of 39 455 units (inclusive of Mercedes-Benz sales) during December 2010. Export sales (excluding Mercedes’ contribution) showed a 38,3 percent decline with 13 665 units moved in December 2011 against the 22 157 units from the corresponding period in 2010.

New vehicle sales in 2011 were broadly in line with Naamsa projections which had expected an improvement in new vehicle sales for the year of up to 15 per cent. The industry aggregate sales for calendar 2011 at an estimated 571 425 units had improved by 78 518 vehicles or about 15,9 per cent compared to the total of 492 907 new vehicles sold in South Africa during the previous year. Furthermore, factoring Great Wall Motors 6 545 units for 2011 – not split according to segment – the total South African new vehicle market last year would have been around 578 000 vehicles. But while the overall figures are positive, they still fall well below the 714 315 units achieved in 2006.

On balance, 2011 turned out to be a year of relatively solid growth. Initial calculations indicated that motor industry new vehicle related sales turnover had grown by about 18 per cent, based on volume increases and a weighted average estimated increase of about 4 per cent in new vehicle prices, during 2011 to reach about R160 billion for the year. The used vehicle market was estimated to have reached about 650 000 units which in turn had provided support to the automotive retail and distributive trade.

Export sales performed relatively well during 2011 but still fell short of the 300 000 units that Naamsa initially projected. Even so, the figure of just under 272 000 units still represents the second highest annual export figure on record. Assuming continued demand in most export markets, projected higher exports to African countries and factoring in the contribution of the Ford global compact vehicle export programme – industry export sales during 2012 could improve by some 50 000 vehicles or 18,5 per cent over 2011. Total Industry exports are projected to reach about 320 000 units during 2012.

Assuming local economic growth of between 3 and 3,5 per cent in 2012 and taking other doemstic and international trends into account, the outlook for 2012 in terms of Industry vehicle sales by sector will reportedly look like this:

The 2012 projections are relatively conservative, with an expectedimprovement of about 7,0 per cent in domestic sales volumes for the year.

While international and domestic focus will remain on new models and products through sustained investment in new technologies. In South Africa, the industry will continue to place an emphasis on theneed for more environmentally friendly fuels and vehicles.

Overall, factoring in the expected improvement in domestic sales together with the anticipated growth in exports, domestic production of motor vehicles in South Africa during 2012 was expected to rise from the approximately 540 500 vehicles produced in 2011 to about 610 000 units in 2012 – an increase in vehicle production of about 13 per cent.

You can view the Naamsa's December 2011 report by clicking on the DOCUMENTS tab above the featured image on this article.