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New car sales up 7.5% in May

4 Jun 2013

Sales of motor vehicles surprised analysts in May and figures compiled by the National Association of Automobile Manufacturers of SA (Naamsa) and released by the Department of Trade and Industry (DTI) indicated on Monday (3 June) that sales had risen 7.5%.

"Aggregate Industry sales of 53‚997 units for May reflected an increase of 7.5% or 3‚750 vehicles from the 50‚247 units sold in May last year‚" the association said in a statement.

The figures indicated that 9% of sales were to corporate fleets‚ the rental industry and the government‚ suggesting that fleet managers are trying to avoid price rises associated with inflation along with the falling value of the rand.

Naamsa warned, though, that the outlook for the rest of the year was "less promising".

"Domestically‚ expectations of lower GDP (gross domestic product) growth and above-inflation new vehicle price increases - as a result of the sharply weaker exchange rate and the April 2013 increase in carbon dioxide vehicle emission taxes on new cars and certain categories of new light commercials - will contribute to a more difficult trading environment‚" Naamsa said.

Standard Bank head of asset finance Sydney Soundy said that inflation would soon hit the industry.

"The exchange rate will impact the vehicle market through vehicle price inflation and indirectly through the fuel price fluctuations‚" he said.

"The rand's weakness will also transfer to vehicle prices and energy costs (in particularly fuel prices). Fuel prices have risen by 7.8% for petrol (inland) and 11% for diesel (inland) since January last year. Furthermore‚ the price of fuel in the country has gone up by 210.5% and 354% for petrol and diesel respectively since 2001‚" Soundy added.

Source: I-Net Bridge

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