http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.05Change: -0.16
R/$ = 11.99Change: -0.17
Au 1203.45 $/ozChange: 6.21
Pt 1154.00 $/ozChange: 5.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 05, 2009

New vehicle sales slumped 43% in April

Back
Ford CEO Hal Feder speaks on the company's April results Cameraperson: Nicholas Boyd Editing: Darlene Creamer
 
 
 
Africa|Aggregate|Rental|Trucks|Africa|Automotive|Manufacturing|Services|Power|Operations
Africa|Aggregate|Rental|Trucks|Africa|Automotive|Manufacturing|Services|Power|Operations
africa-company|aggregate|rental|trucks|africa|automotive|manufacturing|services|power|operations
© Reuse this



The National Association of Automobile Manufacturers of South Africa (Naamsa) on Tuesday reported that sales in all segments of the South African new vehicle market, as well as export sales, had continued to register sharp declines, compared with the corresponding month last year.

In aggregate terms, April recorded a year-on-year decline of 43,7% in new vehicle sales, which was the worst on record.

In addition to a slowing economy and depressed consumer spending, the main factor contributing to the massive decline was April’s large number of public holidays, Naamsa reported.

The organisation reported new vehicle sales for April at around 24 063 units, which reflected a massive decline of 18 262 units, or 43,1% compared with the 42 325 units sold during the April 2008. Factoring in aggregate vehicle sales reported by the AMH Group, the year-on-year decline amounted to 43,7%.

Overall, of the total Naamsa reported industry sales of 24 063 vehicles, 83,1% or 20 001 units represented dealer/retail sales, 4,4% sales to government, 7,5% represented sales to the car rental industry, and 5% into industry’s corporate fleets.

New car sales for April were recorded at 15 071 units, which reflected a decline of 9 033 units or 37,5% compared with the 24 104 new cars sold during April 2008. Factoring in aggregate new car sales reported by the AMH Group, the year-on-year decline had amounted to 10 615 units or a fall of 38,8%.

This constituted the largest year-on-year monthly decline in new car sales over the past 24 years.

Naamsa reported that sales of new light commercial vehicles (LCV), bakkies, and minibuses were recorded at around 7 481 units during this period, reflecting a substantial decline of 7 364 units or 49,6% compared with the 14 845 units of the corresponding month last year. Taking account of the LCV sales reported by the AMH Group, the year-on-year decline amounted to 7 880 units or 49,5%.

Sales of vehicles in the medium and heavy truck segments of the industry had registered substantial falls during April, with sales at 691 units and 820 units respectively, which was a massive decline of 586 units or 45,9%, in the case of medium commercials, and 1 279 units or 60,9%, in the case of heavy trucks and buses. This was compared with the corresponding month last year.

Naamsa reported that the continuing weakness in medium and heavy commercial vehicle (HCV) sales confirmed a downturn in investment spending by the private sector and reflected that business confidence was under pressure. The lower sales in the sector also reflected continuing difficulty experienced by truck operating businesses in obtaining finance.

With one-third of calendar 2009 accounted for, aggregate industry new vehicle sales recorded at 128 164 units, reflected a decline of 36,4% compared with the 201 473 vehicles sold during the corresponding four months last year.

Automotive producer Ford on Tuesday stated that dealer sales for April had fallen to 20 000 units for the month, which was akin to levels last seen in December 2002.

Speaking at a function hosted by Naamsa, Ford sales and marketing vice president, Jacques Brent stated that only 12 000 passenger and 6 500 LCV had been sold during the month.

Year-on-year, Ford sales have declined by 35,5% in January, with February recording a 36% decline, March a 30% decline, and April a 29% decline in vehicle sales.

HCV were under a lot of pressure and April sales were down 60,7%, which Brent said was caused mostly by the number of holidays during the month, but also because of the downscaling in commercial operations.

EXPORTS DROP

Naamsa stated that the decline in exports of South African-produced motor vehicles had accelerated during April 2009, and at 11 479 vehicles had registered a decline of 11 057 vehicles or 49,1% compared with the 22 536 vehicles exported during April 2008.

The slowdown in South Africa’s major export markets was expected to translate into further declines in the number of vehicles exported by the industry during calendar 2009. 


All sectors in the South African automotive value chain continued to experience extremely difficult operating conditions with an increasing number of businesses, particularly in the auto parts manufacturing and retail sectors, fighting for survival, Naamsa said.

The most recent 1% reduction in interest rates and the resultant lower debt servicing costs would bring some relief to hard-pressed consumers and businesses, while domestic sales of new vehicles were expected to remain under pressure in the short-to mediu- term.

However, a revival in consumer expenditure on the back of lower interest rates, together with stimulatory government spending, should start to lend support to the domestic market during the second half of the year.

“Any improvement in industry new vehicle exports would only materialise once the severe current global financial and economic crisis abated and confidence returned to international markets. More recently, positive signs had emerged in the form of a return of some confidence in international financial markets,” Naamsa said.
Financial services provider Nedbank stated that vehicle sales were expected to remain weak in the months ahead, as economic conditions continued to deteriorate both locally and globally.

Domestically, rising unemployment, weak income growth as well as high household debt should continue to weigh heavily on consumer confidence and purchasing power.

“Some recovery in passenger vehicle sales is likely to be experienced during the second half of the year as previous interest rate cuts start to take effect, while commercial vehicle sales could remain weak in line with the slowdown in fixed investment activity and the overall economy. The export market will be volatile during the year and will be driven by the developments in major export destinations,” Nedbank reported in a statement.

Absa expected vehicle sales for the year to drop by between 24% and 25%, believing that the market would likely bottom out during the middle of the year, as well as regain some ground towards the end of the calendar period.

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Transport & Logistics News
Updated 3 hours ago Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review. Capex...
SERVODRIVE PRESS There is an opportunity in South Africa to create a competitive advantage over conventional metal-pressing operations
Updated 3 hours ago Local automotive products manufacturer GUD Holdings will increase its product offering to the automotive sector following its R100-millon investment in a 630 t servo drive transfer press and a new manufacturing site in Port Elizabeth, in the Eastern Cape.
Updated 3 hours ago The South African automotive industry is unlikely to see a future wage settlement at a level lower than the 8% to 10% increases a year agreed to in a range of three-year wage deals signed in the retail, component and assembly sectors in 2013, says Nissan South Africa...
More
 
 
Latest News
The presidency on Thursday said it would not entertain what it called rumours and gossip about operations at Eskom. "President Jacob Zuma has been kept fully briefed about the developments at Eskom and the attempts being made by the Minister of Public Enterprises, Ms...
A senior US embassy official has urged the South African government to address a number of mixed messages on the openness of the country to foreign investment so as to take advantage of a growing appetite among American companies for investments into the country and...
More
 
 
Recent Research Reports
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
 
 
 
 
 
This Week's Magazine
Updated 3 hours ago Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review. Capex...
Updated 3 hours ago After several years of navigating project-threatening red tape and currency fluctuations, the 4.4 MW Bronkhorstspruit biogas power plant, which will supply clean energy to a leading automotive manufacturer in Gauteng, is expected to enter production before June....
RESOURCEFUL The raw material for the pilot plant would be supplied from the dissolving wood pulp plants at Sappi’s Saiccor and Ngodwana mills, in South Africa, and the Cloquet mill, in the US
Updated 3 hours ago South African paper and pulp producer Sappi reported earlier this month that it would build a pilot plant for the production of low-cost Cellulose NanoFibrils, or CNF (nanocellulose) at the Brightlands Chemelot Campus in Sittard-Geleen in the Netherlands.
Updated 3 hours ago The long-term outlook for Nigeria is a country that has the potential to be very strong. So affirmed International Monetary Fund (IMF) Nigeria Mission Chief and Senior Resident Representative Dr Gene Leon on recently. "But we are starting from a point of huge...
Updated 3 hours ago Poor infrastructure planning and inadequate maintenance are becoming increasingly problematic for new developments and the associated infrastructure required to support such developments.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96