The National Association of Automobile Manufacturers of South Africa (Naamsa) has cut its forecast for new-vehicle sales for the year by 32 500 units.

In its second quarter review of business conditions in the domestic automotive market, published this week, Naamsa forecasts 2015 new-vehicle sales to retreat into negative territory, to 626 500 units, compared with the 659 000 units predicted in May.

The South African new-vehicle market reached 644 504 units in 2014.

Considering Naamsa’s upbeat February projection of a 2015 market of 671 000 units, it is clear the outlook for new-vehicle sales has deteriorated sharply as the year has progressed.

Subdued levels of economic activity, electricity supply constraints, the impact of higher personal taxation, petrol
price inflation, new vehicle price increases and higher interest rates all contribute to declining sales, notes Naamsa in its second quarter report.

Naamsa has also cut deeply into its forecast for the 2016 new vehicle market, at 651 500 units, as stated in its newest report, down from the 717 000 units projected in February.

The newest forecast for domestic vehicle production mirrored that of sales, at 609 500 units, compared with 627 500 units as stated in February.

Domestic production reached 566 083 units in 2014.

The newest forecast, however, will still be a record for the local industry.

The good news is that Naamsa’s newest projections indicate that exports will improve to 326 000 units in 2015, compared with 276 873 units in 2014.

This is an improvement on the February forecast of 321 500 units.

The African export market constitutes the only loss for South African auto makers this year, showing an 18% decline, to 25 512 units, in the first six months of 2015 compared with the same period last year.

This is a continued deterioration from the 42 243 units recorded in the first six months of 2013.

The European export market was up 96% in the first half of 2015 compared with 2014, to 82 454 units. North America was up 6.1%, to 28 018 units, Asia increased by 26.8%, to 14 173 units, and Australasia was up 190.5%, to 15 784 units.

Exports to South America increased from 103 units to 2 998 units.

Naamsa says exports into Africa have been impacted by regulatory changes, notably in Algeria, and import duty increases, notably in Nigeria.