Vehicle sales continued their rapid decline evident since last year, yet again taking a pummelling in May.

According to the latest statis- tics released by the National Association of Automobile Manufacturers of South Africa (Naamsa) and Associated Motor Holdings (AMH), May vehicle sales were down 32,9%, compared with the 43 197 units sold during the corresponding month last year.

Passenger vehicle sales declined by 25,9%, to 18 896 units, while light commercial vehicle sales were down 41,6%, to 8 667 units.

Sales in the medium commercial vehicle segment dropped by 41,9% in May 2008, to 528 units.

The heavy commercial vehicle segment cooled by a massive 54,9%, recording only 881 unit sales during May.

Although May sales increased over April sales by some 10%, this is nothing to cheer about, comments Ford Motor Company of Southern Africa sales and marketing vice-president Jacques Brent.

“May was one of the poorest sales months on a daily sales rate basis to hit South Africa in recent history.”

The only reason for the apparent increase is the num- ber of public holidays in April during which no sales were recorded.

Toyota South Africa presi- dent and CEO Johan van Zyl believes sales of passenger and light commercial vehicles are showing signs of stabili- sing at a new level around 35% down on the average 2008 level.

However, he adds that the heavy and extra-heavy truck sectors are still a concern, as sales in these markets continue to decline sharply.

The only aspect offering a glimmer of hope in the current depressed market is Reserve Bank governor Tito Mboweni’s announcement of a rate cut recently.

“From a dealer perspective, we remain hopeful that the latest 100 basis points cut in the prime lending rate will impact positively on con- sumer confidence levels going forward,” comments McCarthy CE Brand Pretorius.

“With the interest rate cycle usually leading the new-car sales cycle by some eight months, it is possible that the new-car sales cycle could begin bottoming out in the coming months,” adds Volkswagen of South Africa sales and marketing director Mike Glendinning.

“However, the rate of growth in new passenger car pricing that has occurred so far in 2009 is a factor that will continue to exert pressure on market volumes, and extend the period of consolidation in the market before possible recovery begins during late 2009 and early 2010,” he notes.

It is expected that vehicle prices will increase around 25% in 2009.

Vehicle financier Wesbank says the 4,5% drop in the interest rate since December last year will indeed help to put some money back in consumers’ pockets.

WesBank executive head of sales and marketing Chris de Kock says current economic circumstances have led to a noticeable increase in the average replacement cycle of vehicles, which continues to affect new-vehicle sales.

According to the WesBank book, the average replace- ment cycle three years ago was every 29 months. Today, how- ever, consumers will wait up to 37 months before replacing their current vehicles.

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