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Johannesburg - The high jump in new car sales during February should not be interpreted as a sign that South Africa's depressed automotive sector is out of the woods, say industry experts.
New vehicle sales increased 20.5% to 39 312 units during February compared to the same month a year ago, according to figures released by the National Association of Automobile Manufacturers of South Africa (Naamsa) on Tuesday.
February's vehicle sales increased 3.3% from January. The number of cars sold during the month is the highest since October 2008, which was around the time consumer demand for cars nosedived.
"The improvement should be seen in relation to the low sales levels in February 2009 which had reflected the impact of the global financial crisis," said Naamsa in a statement on Tuesday.
Vehicle sales increased 18% over the first two months of this year, compared to January and February 2009.
However, Malcolm Gauld, vice-president of sales and marketing at General Motors South Africa (GMSA), said that sales numbers may have been inflated due to rental companies boosting their fleets ahead of the 2010 Fifa World Cup.
'Not sustainable'
"This is not sustainable over the course of the year," he said.
Ford Motor Company of South Africa has echoed Gaulds' views. The car manufacturer expects that sales activity will adopt a more muted tone around the middle of this year.
"Our forecast is for a small recovery over the course of the year," said Ford.
GMSA sees the local sales market growing by about 6% to 8% this year.
Volkswagen South Africa said a recovery will be driven by the slow and steady improvement in households' economic circumstances and their willingness to request credit.
GMSA research found there may be a small change in attitude towards long-term debt. New vehicle finance applications increased 2% during February month on month.
Meanwhile, exports are also expected to improve this year as South Africa's major export markets emerge from recession.
Currently, exports are still down. The number of outbound cars from South Africa fell 5.1% to 14 876 vehicles in February, compared to the same month last year.
"Manufacturer's projections suggested that overall industry export sales could grow by about 32% from last year's level," said Naamsa.
- Fin24.com