New vehicle sales in February, at 53 220 units, crept up 1.6% over sales in February last year, reported the National Association of Automobile Manufacturers of South Africa (Naamsa) on Monday.

This was much slower than the 14.1% year-on-year growth recorded in January.

The new passenger car market, at 36 666 units, inched up 304 units, or 0.8%, compared with February last year.

Sales of light commercial vehicles were up 4.7%.

The truck market, however, could not mirror this positive trend. Sales of medium commercials, at 868 units, were down 7.6%, with the heavy trucks and buses market declining by 2.4%, to 1 496 units.

Exports of new vehicles from South Africa had a more positive month, growing 22.4%, to 27 611 units, compared with February last year.

Naamsa said vehicle exports were expected to improve further over the balance of the year.

Standard Bank Vehicle Asset Finance head Sydney Soundy said factors that might serve to boost sales in the domestic market this year were low interest rates and the natural vehicle replacement cycle.

However, a number of factors could also subdue sales, including modest economic growth in South Africa in 2013 at 2.5%, a weak exchange rate that would have a negative effect on vehicle pricing, rising carbon emissions tax as from April, potential labour interruptions in the automotive sector later this year, as well as increases in food, energy and transport costs, impacting on consumer disposable income.

Soundy said the household debt to disposable income ratio also remained high, with the number of consumers with impaired credit records at 46.7% – a number which had seen no improvement over the last four years.

WesBank sales and marketing executive head Chris De Kock commented that  while new vehicle prices were increasing, dealers were paying less for used cars as the supply and demand side of this market corrected itself. This would see the pricing gap between new and used grow and consumers were likely to start seeing more value in used vehicles again. He believed this would reverse the trend of potential used vehicle buyers being enticed into the new vehicle market, placing further pressure on the growth rate of new cars.

He noted that WesBank book data also showed that the average transaction value on new cars continued to rise steadily, reaching R226 076 in February compared with less than R200 000 two years earlier, showing the impact of new car price increases; this while the used average value remained flat.