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Cape Town - The domestic automotive industry is holding up relatively well in the current difficult economic environment, the National Association of Automobile Manufacturers of SA (Naamsa) said on Tuesday.
It pointed out that domestic new vehicle sales were closely correlated with the overall performance of the economy and confidence levels.
"The fundamental challenge confronting the country at present is lack of confidence – on the part of business and consumers. Concerted steps are required by business, government and labour to create a more investor-friendly environment as a means of boosting growth. The improvement in new car sales and the strength in recent months in the light commercial vehicle segment were, therefore, most encouraging," said Naamsa.
"The recent 25 basis points reduction in interest rates should provide some relief for hard pressed consumers, while the progressive improvement in SA’s trade balance over the past two years would support the exchange rate and in turn would moderate new vehicle price inflation."
Naamsa continues to anticipate that the overall market for 2017 would probably turn out to be fairly flat at levels similar to those recorded in 2016. Vehicle exports should continue to benefit from global economic growth at about 3.5%, in its view.
READ: SA auto industry in for another bumpy year - Naamsa
July data
Aggregate domestic new vehicle sales in July had recorded an encouraging improvement, led by new car and light commercial vehicle sales, according to Naamsa.
Medium and heavy commercial vehicle sales, however, remained under pressure, while new vehicle exports had registered strong gains during the month.
July 2017 aggregate new vehicle sales at 46 719 units had increased by 1 849 units (4.1%) from the 44 870 vehicles sold in July last year. July, 2017 export sales at 35 486 vehicles had registered a gain of 6 456 units (22.2%) compared to the 29 030 vehicles exported in July last year.
Overall, out of the total reported industry sales of 46 719 vehicles, an estimated 36 999 units (79.2%) represented dealer sales, 13.8% represented sales to the vehicle rental industry, 3.9% to government and 3.1% to industry corporate fleets.
According to Naamsa, the July, 2017 new car market reflected an encouraging turnaround and at 30 826 units had recorded a gain of 1 791 cars (6.2%) compared to the 29 035 new cars sold in July last year.
The car rental industry had accounted for an estimated 18.2% of new car sales in July, 2017. The rental industry share was understated since it excluded data for a number of automotive companies.
READ: Junk status still denting new car sales
Light commercial vehicles
Domestic sales of industry new light commercial vehicles, bakkies and mini buses at 13 774 units during July, 2017 reflected a modest gain of 231 vehicles (1.7%) compared to the 13 543 light commercial vehicles sold during the corresponding month last year. This followed an improvement of light commercial vehicle sales in recent months.
The medium and heavy truck segments of the industry continued to experience extremely difficult trading conditions and at 598 units and 1 521 units, respectively, reflected a decline of 115 vehicles (16.1%) in the case of medium commercial vehicles and, in the case of heavy trucks and buses, a decline of 58 vehicles (3.7%) compared to the corresponding month last year.
Industry new vehicle exports, as previously anticipated, at 35 486 units during July, 2017 reflected a substantial increase of 6 456 units (22.2%) compared to the 29 030 vehicles exported in July last year.
In Naamsa's view, the momentum of vehicle exports is expected to improve further over the balance of 2017.
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