Total industry sales for December reflected a decline of 13,6 per cent compared with the corresponding month in 2001, but new vehicle sales in 2002 held up better than anticipated, according to the latest Naamsa figures.

To view December's new vehicle sales figures, click here.

Total industry sales for December 2002 reflected a decline of 13,6 per cent compared with the corresponding month in 2001, but new vehicle sales in 2002 held up better than anticipated, according to the latest Naamsa figures.

A total of 23 914 units were sold in December, which is a decline of 3 779 units or 13,6 per cent compared with the 27 693 units sold during the corresponding month of 2001.

But despite four interest rate hikes during the year, above average new vehicle price increases and unpredictable international economic developments, the new vehicle market in 2002 performed well. A total of 366 899 units were sold in 2002 compared with 350 065 units sold in 2001, a drop of only 4,6 per cent.

Naamsa adds that sales of new vehicles not reported through the association would probably have added about 14 000 to the 2002 figures (10 000 cars and 4 000 light, medium and heavy commercials vehicles).

The sale of new cars dropped 3,1 per cent from 239 060 to 231 615 units in 2002, while light commercials went down by nine per cent from 115 146 to 104 737. Medium commercials increased by 5,2 per cent from 5 383 to 5 665, while heavy commercials and buses went up by 10 per cent from 7 310 to 8 048 from 2001.

Naamsa comments that the 2002 results can be attributed to strong demand for the car rental/tourism and government sectors, the positive effect of new model introductions and the strength of the South African economy during the year.

Meanwhile, December new car sales and, particularly, new light commercial vehicle sales recorded sharp declines compared with the corresponding month last year. But sales of medium and heavy trucks and buses remained robust.

Naamsa said that the new car and light commercial sales figures should be evaluated in the context of the fact that the market in December is seasonally the weakest of any month in the year. Moreover, the 2002 December sales figures will be compared with the high sales base of December the previous year which had been boosted substantially, at the time, by extensive pre-emptive buying by consumers to avoid expected large price increases early in the new year on the back of the then prevailing weak rand.

But December 2002 new car sales at 15 826 units slowed fairly sharply, down 19,2 per cent on November’s sales of 19 577 vehicles and 9,8 per cent below the December 2001 sales figure of 17 535 units.

Sales of new light commercial vehicles, bakkies and minibuses recorded, for the third month in succession, sharp falls year on year.

December 2002 sales of 7 054 light commercials represented a decline of 2 240 units or 24,1 per cent compared with the 9 294 light commercial vehicles sold during December 2001. The light commercial vehicle sector was particularly vulnerable to the cumulative effect of the four interest rate increases in 2002 and was also negatively affected by lower levels of demand from the agricultural sector.

The medium vehicle segment at 392 units and the heavy truck and bus section at 642 units recorded an improvement of 46 units or 13,3 per cent in the case of medium commercials, and a sharp increase of 124 vehicles or 23,9 per cent, in the case of heavy trucks and buses, compared with the corresponding month last year.

The final 2002 export figures will be available by the middle of January, however, based on the industry’s export performance for the first 11 months of the year, the year on year export sales is expected to increase from 108 001 vehicles in 2001 to 127 500 in 2002.

The year on year expected increase in export sales of about 19 500 vehicles (18 per cent) confirmed South Africa’s growing importance as a manufacturer and supplier of vehicles to global markets.

Naamsa comments that against the background of the relatively weak new car and light commercial vehicle sales performance at the end of the last year, the first few months of 2003 are likely to remain extremely challenging for the automotive industry.

But the strengthening of the rand against all major currencies, prospects of lower inflation and an easing in interest rates, the likelihood of further tax relief in the forthcoming budget on the back of sound and stable macro-economic policies, an expected recovery in the global economy and the general resilience of the domestic economy will support improved demand for new vehicles during the course of 2003.

Aggregate industry vehicle exports, in terms of contractual supply arrangements, are expected to register further growth rising to about 155 000 in 2003 from an expected export figure of 127 500 for last year.

To view December's new vehicle sales figures, click here.