NAAMSA new vehicle sales drop 3.1% in February
In amplification of the new vehicle sales statistics for the month of February, 2014 – released today for public consumption via the website of the Department of Trade & Industry - the Association commented that year on year growth in total aggregate new vehicle sales had declined modestly compared to the sales levels of the corresponding month last year. In the event, February 2014 aggregate new vehicle sales at 51 814 units registered a decline of 1 662 vehicles or a fall of 3.1% compared to the 53 476 vehicles sold in February last year. The consumer driven new car segment had recorded a year on year decline of 5.4% whilst the investment trend sensitive commercial vehicle segments had registered gains, light commercials 0.9%, heavy commercial vehicles 3.6%, extra heavy trucks 19.7 % and buses 17.8%. Moreover, the February 2014 export sales number at 21 819 units reflected a decline of 5 262 vehicles or a fall of 19.4% compared to the 27 081 vehicles exported in February last year.
Overall, out of the total (disaggregated) reported Industry sales of 51 814 vehicles, 83.5% or 43 262 units represented dealer sales, 8.7% represented sales to the vehicle rental Industry, 4.0% to Industry corporate fleets sales and 3 .8% to government.
The new car market had experienced pressure during February 2014 and at 34 414 units reflected a decline of 1 976 units or a fall of 5.4% compared to the 36 390 new cars sold in February last year.
Domestic sales of new light commercial vehicles, bakkies and mini buses at 14 879 units during February 2014 reflected a marginal improvement of 127 units or 0.9% compared to the 14 752 light commercial vehicles sold during the corresponding month last year.
Sales of vehicles in the medium and heavy truck segments of the Industry at 910 units and 1 611 units, respectively, reflected a mixed performance with a decline of 20 units or a fall of 2.2%, in the case of medium commercial vehicles, and a strong gain of 207 units or an improvement of 14.7%, in the case of heavy trucks and buses, compared to the corresponding month last year.
Industry new vehicle exports during February, 2014 at 21 819 vehicles had registered a decline of 5 262 units or a fall of 19.4% compared to the 27 081 vehicles exported in February last year. The absence of an export contribution by Mercedes-Benz SA, as the company retooled and prepared for the production of the new C-Class later in the year, had contributed in part to the lower Industry export sales number.
Following four successive years of growth in domestic new vehicle sales, prospects for 2014 would be affected by subdued economic growth, above average new vehicle price increases as a result of exchange rate weakness and upward pressure on interest rates. Unsurprisingly, consumer confidence was under pressure with high levels of indebtedness, sharp increases in energy and transport costs, particularly in Gauteng due to e-tolling. These factors would impact on consumer demand, principally in the case of the new car market. As a result, domestic trading conditions were anticipated to remain challenging with pressure on margins in all major sectors.
As a result of the difficult current macro-environment, the general Industry consensus was that the domestic market in 2014 was likely to be flat and might even show modest declines, in the various segments, compared to 2013.
In contrast, vehicle exports should benefit from improving global economic conditions and, barring domestic supply disruptions, could well show growth during the second half of 2014 particularly in respect of vehicle exports to Asia, Africa and Europe.
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