October New Car Sales Up

October New Car Sales Up
 

The remarkably strong domestic sales trend experienced in new vehicle sales in September continued in October, according to data released by the National Association of Automobile Manufacturers of South Africa (Naamsa) on Monday.

Total new vehicle sales rose 4.9% year on year (y/y) to 59,384 units. This follows an 11.5% y/y rise on new car sales in September.

Overall, out of the total reported industry sales, 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,” said Naamsa.

Domestic sales of new light commercial vehicles, bakkies and mini buses increased by 14% while sales of vehicles in the medium and heavy truck segments of the industry reflected a mixed performance, with medium commercial vehicle sales declining by 11%.

Heavy trucks and buses showed an improvement of 10.4%. Naamsa said the strength in heavy truck sales was encouraging and reflected improved investment sentiment.

Local vehicle exports during October increased by 33%.

“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,” said Naamsa.

Naamsa said while 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,” said Naamsa.

Against the background of current normalised industry vehicle production volumes, further improvement in export numbers was anticipated over the remainder of 2014 and into 2015.

Ignition Live Reporter