NAAMSA – New Vehicle Sales Recorded Gains

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Commenting on the new vehicle sales statistics for the month of September, 2017 NAAMSA said that, for the fourth month in succession, aggregate domestic new vehicle sales had recorded gains.

Despite the subdued economy, compounded by political and economic policy uncertainty, the new vehicle market had registered encouraging gains lead by upward momentum in the new light commercial vehicle and new car segments. New vehicle exports had also registered strong gains. The recent sharp increase in the Reserve Bank’s leading indicator and the improvement in the Purchasing Manager’s Index suggested that further improvement in domestic sales could be expected in the months ahead.

September 2017 aggregate new vehicle sales at 50 675 units had increased by 3 318 units or 7.0% from the 47 357 vehicles sold in September last year. September, 2017 export sales at 36 359 vehicles had registered an improvement of 3 595 units or a gain of 11.0% compared to the 32 764 vehicles exported in September last year.

Overall, out of the total reported Industry sales of 50 675 vehicles, an estimated 40 654 units or 80.2% represented dealer sales, an estimated 13.9% represented sales to the vehicle rental Industry, 3.0% to government and 2.9% to Industry corporate fleets. The contribution by the car rental sector to sales remained difficult to determine exactly since four companies did not report sales by channel.

The September, 2017 new car market had reflected further upward momentum and at 33 669 units had recorded a gain of 1 868 cars or an improvement of 5.9% compared to the 31 801 new cars sold in September last year. The car rental Industry had accounted for an estimated 18.9% of new car sales in September, 2017.

Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 14 523 units during September, 2017 reflected a substantial gain of 1 520 vehicles or an improvement of 11.7% compared to the 13 003 light commercial vehicles sold during the corresponding month last year. This was on top of the improvement in light commercial vehicle sales in recent months.

The medium and heavy truck segments of the Industry reflected a mixed performance and at 692 units and 1 791 units, respectively, had recorded a fall of 80 vehicles or a decline of 10.4%, in the case of medium commercial vehicles, and in the case of heavy trucks and buses, a slight improvement of 10 vehicles or an increase of 0.6 % – compared to the corresponding month last year. The figures reflected generally poor investment sentiment in the economy.

The strong gains in the September vehicle exports were in line with expectations and total 2017 export numbers were expected to post a marginal improvement on 2016.

Over the past four months, the domestic automotive industry had held up well in the current challenging economic environment. A number of factors had contributed to the improved momentum in local sales and these included reduced new vehicle pricing pressures currently at an annualized rate lower than inflation, the July, 2017 reduction in interest rates and continued highly attractive sales incentives. Normally sales during the second half of the year were higher than aggregate sales in the first half and an overall year-on-year improvement of around 1.5% for 2017 was therefore likely. In the case of vehicle exports, continued positive global economic growth prospects should support new vehicle export sales.

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