Public holidays put vehicle sales in park
May 5, 2009
Johannesburg - New vehicle sales were the worst on record in April, due to the month's high number of public holidays and the slowing economy, the National Association of Automobile Manufacturers of SA (Naamsa) said on Tuesday.
"In addition to a slowing economy and depressed consumer spending, the main factor contributing to the massive decline was the large number of public holidays that fell during April 2009," Naamsa said in a statement.
Naamsa reported new vehicle sales for April 2009 at 24 063 units, reflecting a massive decline of 18 262 units or 43.1 percent compared to the 42 325 units sold during the corresponding month last year.
Factoring in aggregate vehicle sales reported by the AMH Group, the year on year decline amounted to 43.7 percent, Naamsa said.
It added that sales in all segments of the South African new vehicle market, as well as export sales, continued to register sharp declines compared to the corresponding month last year.
"In aggregate terms, the year-on-year decline in new vehicle sales was in fact the worst on record."
Overall, out of the total Naamsa reported industry sales of 24 063 vehicles, 83.1 percent or 20 001 units represented dealer/retail sales, 4.4 percent sales to government, 7.5 percent represented sales to the car rental industry and five percent into industry's corporate fleets, Naamsa reported.
April's new car sales came in at 15 071 units reflecting a decline of 9033 units or 37.5 percent compared to the 24 104 new cars sold during April 2008.
Factoring in aggregate new car sales reported by the AMH Group, the year-on-year decline amounted to 10 615 units or a fall of 38.8 percent.
"This constituted the largest year-on-year monthly decline in new car sales over the past 24 years," Naamsa commented.
Sales of new light commercial vehicles, bakkies and minibuses at 7 481 units during April, 2009 reflected a substantial decline of 7 364 units or 49.6 percent compared to the 14 845 units of the corresponding month last year.
Taking account of the light commercial vehicle sales reported by the AMH Group, the year-on-year decline amounted to 7 880 units or 49.5 percent.
According to Naamsa, sales of vehicles in the medium and heavy truck segments of the industry registered "substantial falls".
The medium truck sales at 691 units in April was a decline of 586 units or 45.9 percent compared to the corresponding month last year.
The heavy truck sales at 820 units had declined by 1 279 units or 60.9 percent compared to the corresponding month last year.
"The continuing weakness in medium and heavy commercial vehicle sales confirmed a downturn in investment spending by the private sector and reflected business confidence under pressure," Naamsa said.
The lower sales in the sector also reflected continuing difficulty experienced by truck operating businesses in obtaining finance, the association said.
With one third of 2009 accounted for, aggregate industry new vehicle sales at 128 164 units reflected a decline of 36.4 percent compared to the 201 473 vehicles sold during the corresponding four months last year, it added.
The decline in exports of South African produced motor vehicles accelerated during April 2009 and at 11 479 vehicles had registered a drop of 11 057 vehicles or 49.1 percent compared to the 22 536 vehicles exported during April last year.
"The slow down in South Africa's major export markets (Eurozone, Japan and the United States) is expected to translate into further declines in the number of vehicles exported by the industry during calendar 2009," Naamsa said.
It added that all sectors in the South African automotive value chain continued to experience extremely difficult operating conditions with an increasing number of businesses, particularly in the auto parts manufacturing and retail sectors, fighting for survival.
"The most recent one percent reduction in interest rates and the resultant lower debt servicing costs will bring some relief to hard pressed consumers and businesses," Naamsa said.
Domestic sales of new vehicles were expected to remain under pressure in the short to medium term.
However, a revival in consumer expenditure on the back of lower interest rates, together with stimulatory government spending, should start to lend support to the domestic market during the second half of the year, Naamsa noted.
Any improvement in industry new vehicle exports would only materialise once the severe current global financial and economic crisis abated and confidence returned to international markets.
More recently, positive signs had emerged in the form of a return of some confidence in international financial markets, Naamsa said. - Sapa
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