Recession in Car Sales deepens, but Exports profit from weak Rand

September’s new vehicle sales in SA declined by 9% year-on-year (y/y) to 55 322 units, the Department of Trade and Industry’s monthly data showed yesterday. The good news, however, is that y/y vehicle exports increased by 14.3% to 35 181 units. Vehicle exports for 2015 remained on target to improve, in annual terms, by over 20% to a projected industry record export number of about 335 000 for the year, explained the National Association of Automobile Manufacturers of SA (Naamsa). “Current conditions in the automotive industry reflected a further weakening in domestic sales contrasted by record vehicle exports,” Naamsa said in a statement. “Given the present difficult economic environment in South Africa, this trend was likely to continue over the medium term. “The latest figures showed that the recession in domestic new vehicle sales had accelerated further during September,” it said. “Export sales of new motor vehicles had however achieved a new milestone…”

Naamsa said consumers were reluctant to purchase durable goods despite attractive incentive packages on offer by most automotive companies. “An interesting feature of the September new car market was that … one in every five new cars sold had been purchased by the car rental industry.” Naamsa said domestic new car and commercial vehicle sales would remain under pressure. “For the year as a whole, industry new car and commercial vehicle sales projections were likely to be revised down. “In contrast, automotive industry vehicle production remained on a very strong footing and the higher new vehicle export sales would continue to support the industry’s manufacturing output and contribute positively to South Africa’s balance of payments. “The expected improvement in global economic growth in 2015 through 2017 should continue to support higher exports of South African produced vehicles to close on 100 international markets.”

As a barometer of the gross domestic product, the slowing vehicle sales is indicative of an economy that is continuing to slow!

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