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The National Association of Automobile Manufacturers of South Africa (Naamsa) said the overall new vehicle market declined further in December 2019 but saw a year-on-year increase over December 2018.

Naamsa confirmed aggregate domestic new vehicle sales at 41 698 units reflected an increase of 1 678 units or 4,2 percent from the 40 020 vehicles sold in December 2018. The December 2019 new passenger car market reflected a year-on-year volume increase of 9,1 percent but a decrease in the case of light commercial vehicles of 6,7 percent.

Overall, out of the total reported industry sales of 41 698 vehicles, an estimated 35 166 units or 84,3 percent represented dealer sales, an estimated 9,3 percent represented sales to the vehicle rental industry, 3,8 percent to government and 2,6 percent to industry corporate fleets.

Vehicle sales are linked to the strength of the economy and the new vehicle market in South Africa in 2019 continued the downward trajectory experienced since 2013, with the exception of 2017, when a marginal year-on-year increase was registered.

Following the decline in new vehicle sales of 1,0 percent, in volume terms, in 2018 compared to 2017 - new vehicle sales had declined by 15 601 units, or 2,8 percent, from 552 227 units in 2018 to 536 626 units in 2019.

The decline in new passenger car and light commercial vehicle sales occurred despite the strong contribution by the car rental sector during the year and an improvement in new vehicle affordability in real terms.

Although the domestic new vehicle market was progressively declining in 2019, vehicle exports once again was on the rise showing substantial growth year-on-year. Vehicle exports had registered another annual record and total vehicle exports at 386 863 units reflected an improvement of 35 724 vehicle exports or a gain of 10,2 percent compared to the 351 139 vehicles exported in 2018. Exports of passenger cars, in particular, had registered a substantial gain, in volume terms, of 17,7 percent.

Risks and opportunities for South Africa remain in 2020. Downside risks for 2020 include the continuing load shedding crisis by Eskom with ripple effects on the economy, Moody’s pending decision on South Africa’s investment rating as well as a continuing weak domestic economic growth outlook. On the positive side, however, the country’s inflation has declined to well within the target range of between 3 percent and 6 percent and the industry’s exceptional export performance is set to continue, Naamsa concluded.