Naamsa (National Association of Automobile Manufacturers of South Africa) commented that new vehicle sales had regained some momentum during the month of October, boosted by exceptionally strong demand by the new car rental industry.
With aggregate industry sales at 44 056 units, there’s an improvement of 8 004 vehicles or 22,2 per cent compared to the 36 052 vehicles sold during the corresponding month in 2009. The year-on-year monthly growth figure of 22,2 per cent, however, remained slightly down on the year-to-date improvement of 23,8 per cent.
This significant recovery comes after the widespread industrial action and associated loss of production during the previous two months. In the event, new vehicle exports for October, 2010 at 27 338 vehicles reflected an improvement of 6 387 vehicles or a gain of 30,5 per cent compared to the 20 951 vehicles exported in the corresponding month last year. It’s expected that throughout the remainder of this year manufacturers with local production facilities would continue to boost output to make up for lost production during the months of August and September as a result of the strike action in the vehicle and component manufacturing sectors. Above average export sales should continue over the next few months.
“The fall-out of the industrial action during September continued to be felt during October sales as stock levels came under pressure, but consumer confidence is higher and, combined with the lowest interest rates since 1979, November sales should perform well before the traditionally slow holiday season,” says vice president of marketing, sales and service, Ford Motor Company of Southern Africa.
The 6 per cent decline in interest rates since end 2008, stable new vehicle prices, modest improvement in loan finance approval rates and pent up replacement demand – should continue to support new vehicle sales. Certain domestic economic performance indicators such as the Purchasing Managers Index and the Reserve Bank’s leading indicator of economic activity suggested that domestic economic conditions would remain challenging.
“The rate of inflation in September registered the lowest level in over five years – promoting steady improvement in the real disposable income of households, already growing at around five per cent year-on-year, and allowing interest rates to fall to the lowest level in thirty years with possible further reductions to come,” says Mike Glendinning, director of sales and marketing, Volkswagen Group South Africa.
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