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New-vehicle sales tumble as economy, politics bite

2nd May 2017

     

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A tough economy and a slew of public holidays, meaning less selling days, both took their toll on domestic new-vehicle sales in April, which, at 34 956 units, were down 5 392 units compared with the same month last year.

Sales numbers released by the Department of Trade and Industry on Tuesday show that new passenger car sales declined by 13.7% in April, to 22 452 units.

Sales of new light commercial vehicles, bakkies and minibuses, at 10 592 units, declined by 13.3%.

Sales of medium trucks, at 562 units, dropped by 3.8%.

New heavy truck and bus sales contracted by 12.1%, to 1 3 50 units.

New-vehicle exports from South Africa also registered a sharp decline in April, dropping 25.5%, to 24 449 units.

The National Association of Automobile Manufacturers of South Africa (Naamsa) noted in a statement that the outlook for new-vehicle sales “had turned negative on the back of the extra-ordinary political events at the end of March”, following modest improvements in sales during the first three months of the year.

President Jacob Zuma on March 30 sacked Finance Minister Pravin Gordhan, as well as Deputy Finance Minister Mcebisi Jonas, in a wide-ranging Cabinet reshuffle.

This was followed by a number of calls for Zuma to resign, including from members within the governing tripartite alliance.

Political and social polarisation in South Africa, together with prospects of lower domestic economic growth over the short to medium term, weighed on business confidence and consumer sentiment, said Naamsa.

“At this stage, the risk for new vehicle sales was on the downside.”

The association was a bit more upbeat about exports, however.

“Indications for the global economy were reasonably positive, with the latest International Monetary Find projections anticipating global growth at around 3.6%.

“This would benefit vehicle exports to Europe, Australasia, the US and South America.

“Naamsa anticipated that export sales would register upward momentum over the balance of 2017, thereby continuing to contribute positively to South Africa’s trade balance.”

 

Edited by Creamer Media Reporter

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