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Naamsa commented that the remarkably strong domestic sales trend experienced last month had continued in October. Export sales had again continued to reflect underlying strength reaching a record industry number of 32 165 vehicle exports. In the event, domestic new vehicle sales – despite subdued economic growth and pressure on consumers’ disposable income – for the month of October 2014, in aggregate terms, at 59 262 units reflected a substantial improvement of 2 654 vehicles or a gain of 4,7% compared to the 56 608 vehicles sold in October last year. The October, 2014 export sales at a record of 32 165 units reflected a massive improvement of 7 973 vehicles or a gain of 33.0% compared to the strike affected industry total of 24 192 vehicles exported in October last year.
Overall, out of the total reported Industry sales of 59 262 vehicles, 77,2% represented dealer sales, 14,3% represented sales to the vehicle rental Industry, 4,3% to government and 4,2% to Industry corporate fleets.
Assisted by another strong contribution by the car rental industry, which accounted for 19,9% of all new cars sold during the month of October, 2014 – the latest monthly new car market had performed above expectations and at 40 666 units reflected an improvement of 646 vehicles or a gain of 1,6% compared to the 40 020 new cars sold in October last year. It was for the second time in 2014 that monthly new car sales had registered year on year growth and the improvement could be attributed to a combination of factors, including, new model launches, incentive packages, pre-emptive buying to avoid expected vehicle price increases, relatively strong corporate purchases, replacement demand and the strong contribution by the car rental sector.
The star performance for the month represented domestic sales of new light commercial vehicles, bakkies and mini buses at which 15 827 units during October, 2014 had registered exceptionally strong gains and reflected an improvement of 1 941 units or 14,0% compared to the 13 886 light commercial vehicles sold during the corresponding month last year. Pre-emptive buying to avoid 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 889 units and 1 880 units, respectively, reflected a mixed performance with medium commercial vehicle sales declining by 110 units or 11,0% whilst heavy trucks and buses had continued to perform well showing an improvement of 177 units or 10,4%. The strength in heavy truck sales was encouraging reflecting improved investment sentiment.
In the case of new vehicle exports, the year on year comparison should take account of the fact that exports in October last year had been affected due to prolonged strike action, at the time, in the vehicle and component manufacturing industries. In the event, industry new vehicle exports during October, 2014 at a record 32 165 vehicles registered a massive improvement of 7 973 vehicles or a gain of 33,0% compared to the 24 192 vehicles exported in October last year.
Whilst the improvement in underlying domestic new vehicle sales and export sales was most encouraging, it was advisable to retain a cautious outlook regarding the expected performance of the automotive sector for the balance of 2014 and into 2015. Subdued economic growth, past increases in interest rates and above-inflationary new vehicle price rises – would translate into a difficult trading environment, particularly at franchise dealer level. The recent strength in the domestic market could result in overall new vehicle sales for 2014 reaching levels similar to those recorded in 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.
