New car sales in November reflected resilience in demand, but the light commercial vehicle sector remained under pressure from higher financing costs and above average price increases, Naamsa said.
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New car sales in November reflected a resilience in demand, but the light commercial vehicle sector remained under pressure from higher financing costs and above average price increases in the year to date, the National Association of Automobile Manufacturers of South Africa said on Tuesday.
Sales of medium and heavy trucks and buses had performed in line with expectations, remaining reasonably robust. Overall, aggregate total industry sales at 28 424 units for the month of November had registered a decline of 3 578 units or 11,2 per cent compared with the 32 002 units sold during the same period last year.
New passenger car sales in November (19 579 units) were 282 units or 1,4 per cent lower that the 19 861 units sold during the corresponding month last year, when sales were boosted by pre-emptive buying at the time.
Even though November new car sales received support from major new product launches and high levels of demand from the car rental industry, its figure was 2,7 per cent or 542 units lower than the 20 121 units sold during October.
Sales of new light commercial vehicles, bakkies and minibuses (7 650) were 3 289 units or 30 per cent lower than the corresponding month last. Compared with October, new light commercial vehicle sales recorded a decline of 1 683 units or 18 per cent.
The slowdown in sales could be attributed to the effect of four interest rate increases year to date, general inflationary pressures and lower levels of demand from the agricultural sector, a Naamsa spokesman said.
Sales of vehicles in the medium and heavy truck and bus segments of the industry during November 2002 had performed reasonably well. With sales of 531 units and 664 units, respectively, medium commercials had improved by 53 units or 11,1 per cent and sales of heavy trucks and buses declined by 60 units or 8,3 per cent compared with November last year.
Some consolidation in the medium and heavy truck sales had been expected following the near record monthly sales figures achieved in October.
The slight decline in new car sales and the sharp decrease in new light commercial vehicle sales during the month should be considered in context. This time last year consumers embarked on a pre-emptive buying spree in anticipation of sharp new vehicle price increases on the back of the severe depreciation of the Rand.
Under the circumstances, the latest new vehicle sales figures should not be construed as reflecting an unexpectedly sharp decline in overall spending, the spokesman said.
On balance, new vehicle sales during 2002 had exceeded earlier industry expectations. In the short to medium term, the industry’s domestic trading environment was expected to remain challenging as “the market continued to consolidate above-average new vehicle price increases and as vehicle buyers adjusted to the higher vehicle financing costs”.
In the longer term, prospects of reduced inflationary pressures, stronger exchange rate and the likelihood of interest rate cuts should boost new vehicle sales.
