As one of the sectors to be hardest hit by a drop in credit demand and diminishing disposable income, new vehicles sales for November 2008 has slumped to a five year low.
According to figures released by the National Association of Automobile Manufacturers of South Africa (NAAMSA), on Tuesday, the motor vehicle industry sold a total of 34 176 units last month, registering a decline of 13 497 units compared to the 47 673 units sold in November 2007.
"Sales in all segments of the South African new vehicle market had weakened significantly suggesting that conditions in the South African economy had continued to deteriorate rapidly.
"Aggregate NAAMSA sales for the first eleven months of 2008 were 20.7 percent lower than the sales recorded during the corresponding eleven months in 2007," said NAAMSA.
Of the overall 34 176 new vehicles sold, NAAMSA said 77.9 percent were sold through retail dealerships, 8.9 percent to the government, 7.7 percent to the car rental industry, and 5.5 percent to industry's corporate fleets.
NAAMSA said that if they had to factor in new car sales that were not reported in detail the year on year (y/y) decline had amounted to 11 096 units or a fall of 33.6 percent.
The sale of light commercial vehicles, bakkies and minibuses amounted to 11 489 units for November this year, which represented a decline of 23.2 percent compared to the corresponding month last year.
Sales of vehicles in the medium and heavy truck or bus segments of the industry had also registered sharp falls during November 2008 and at 868 units and 1 691 units, respectively, had recorded a massive decline of 372 units or 30 percent.
"The latest sales data of heavy truck and extra heavy commercial vehicles suggests that despite the major infrastructural investment projects [linked to the 2010 FIFA World Cup], fixed investment in the South African economy has started to moderate.
"In sharp contrast to the depressed domestic market, exports of South African produced motor vehicles during November 2008 reflected continued strong upward momentum rising to a record monthly total of 31 557 export sales," NAAMSA highlighted.
This increase in motor vehicle exports represents a massive jump of 86.3 percent compared to the November last year.
"Vehicle exports for 2008 as a whole were now projected to reach about 295 000 units," said NAAMSA.
While the export performance of the South African motor vehicle manufacturing industry remained more than buoyant, NAAMSA warned that the immense slow down, and in some cases recession, in the US and many European countries, was likely to dent the demand for South Africa's automotive imports oversees.
"The overall effect would depend on the extent and duration of a recession in the developed markets but this would be counter balanced by expected continued growth in emerging markets.
"Current indications were that overall new vehicle exports during 2009 could register a decline of about 15 percent on the 2008 figure," NAAMSA indicated. - BuaNews