The National Association of Automobile Manufacturers of South Africa (NAAMSA) today released the gloomy results of new-vehicle sales for the month of July 2011. Despite all segments registering an improvement on the corresponding month last year, there are clear signs of a slowing of the growth rate in demand for new vehicles. Possibly a sign of things to come…
Aggregate industry domestic sales for the month of July improved by 4 358 units (10,5 per cent) to 41 345 vehicles compared with July last year. Total year-to-date domestic new-vehicle sales for the first seven months of 2011 remain 15 per cent ahead of the corresponding months in 2010, and in line with industry forecasts, but if this trend continues, that target may not be reached.
New-car sales reflected an improvement of only 2 819 units (9,7 per cent) – the lowest year-on-year improvement in 18 months – despite being bolstered by buoyant demand from car rental companies. The car rental industry accounted for 17,4 per cent of total sales during July 2011).
New vehicles such as the Chevrolet Orlando MPV, Ford Focus and the facelifted Peugeot 207 and 308 did bolster sales for these manufacturers and Chrysler again experienced great results, with its single-model Compass line-up selling 169 units during July. Other solid performers include the Nissan Micra, VW Polo hatch and saloon and Ford Figo. Things to look forward to during 2011 include the impact that the introduction of the single-cab Amarok (and the introduction of 2,0 TSI petrol engines) will have in the LCV segment, along with the facelifted Hilux/Fortuner and the introduction of the Ford Ranger and Mazda BT-50.
Other cars to look out for are the Hyundai Accent, Kia Rio, Suzuki Kizashi and the Volkswagen Jetta.
Sales of new light commercials, bakkies and minibuses reflected an increase of 10,2 per cent compared with July 2010. This segment remains buoyant (up five per cent for the first seven months of 2011 compared with the same period during 2010).
Sales of vehicles in the medium and heavy commercial segments reflected great performances and had recorded an increase of 146 units (23,6 per cent) in the case of medium commercials and 339 units (29,5 per cent) in the case of heavy trucks and buses when compared with July last year. Sales of extra-heavy commercials experienced stellar growth of 43,8 per cent when compared with July 2010. The sales performance of commercials reflect the positive fixed investment associated with major infrastructure projects and remains 25 per cent ahead of the corresponding seven months of 2010. It is likely for this trend to continue to the early parts of next year.
Despite the adverse effects of widespread strike action in the steel and engineering industries during the month, which impacted on the production of new vehicles, exports of SA-built vehicles in July reflected an increase of 1 893 units (8,1 per cent), compared with July 2010. This positive growth is expected to continue with numerous new-vehicle production schedules due to start before the year is out.
New-vehicle sales over the balance of the year are likely to come under increasing pressure as the macro environment is become increasingly unsupportive for the consumer market. The projected annual growth rate for new-vehicle sales of 15 per cent is also beginning to look increasingly optimistic. The decline in the purchasing managers’ index for the fourth consecutive month, as well as continuing decline in the Reserve Bank’s leading indicators, suggests a slower pace of expansion over the medium term. Subdued growth in private sector credit extension (and signs of a rise in interest rates early next year) and in money supply, inflation administered price increases (most noticeably electricity and fuel costs) will also have a drastic impact on future consumer demand. These factors will undoubtedly impact on new-vehicle sales for the remainder of 2011.
