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Oct 02, 2009

September auto sales up on August, but still down 20% on last year

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The total new vehicle market rebounded slightly in September, with sales increasing by 6,1% compared with August, to reach 35 931 units.

This is according to data released on Friday by the National Association of Automobile Manufacturers of South Africa and Associated Motor Holdings.

However, compared with September 2008, the market still showed a decline of 19,5%.

“September sales are reassuring, but by no means an indication yet of the market making significant gains,” commented Ford Motor Company of Southern Africa sales and marketing vice-president Jacques Brent.

Sales of new passenger cars in September showed an increase of 6,2% over sales recorded in August, totalling 23 813 units.

It is likely that sales to car rental companies – similar to what happened in July and August – again accounted for more than 20% of reported sales.

It is estimated that car rental companies took delivery of almost 5 000 vehicles in September, which undoubtedly boosted the market, said vehicle retailer McCarthy CE Brand Pretorius.

Sales to private customers remained under pressure owing to the high levels of household debt and the reluctance of customers to take on fresh debt, he added. Evidence of this was the fact that growth in private sector credit had slowed to its lowest level in more than 40 years in September.

September sales in the light commercial vehicle segment increased by 5,5% from August, but the 10 525 units fell 21,9% short of September 2008 sales.

A similar trend prevailed in the other segments of the South African vehicle market.

The 551 medium commercial vehicles sold were 2% up on last month’s results, but 35,8% in the red compared with September last year.

Sales in the heavy commercial vehicle segment reached 1 042 units, an increase of 10,4% on August’s results, but 48,6% down on the number achieved in September 2008.

Pretorius said that subdued levels of business and consumer confidence were still prevailing, undermining the propensity to buy.

“It is also likely that disposable income will remain under pressure in the coming months, which makes a significant improvement in new vehicle sales over the medium term improbable.”

Pretorius said the motor industry was preparing itself for a tough last quarter.

END OF DOWNTURN IN SIGHT – VWSA

“While continuing to enjoy the support of seasonally strong sales to rental car companies, the performance of the new passenger car market in September proved encouraging, and supportive of the view that the decline in the new car sales cycle that began in June 2006 is currently in the process of bottoming out,” said Volkswagen of South Africa sales and marketing director Mike Glendinning.

“The total passenger car market recorded in September was the largest monthly market recorded to date in 2009,” he said.

However, Glendinning warned that there was still some way to go before the recovery gained real traction.

“Households remain in debt and consumers are wary of borrowing.”

Looking forward, Glendinning expected a slow recovery in the demand for new cars through the end of 2009 and into 2010, as the economy moved out of recession in coming months, taking pressure off financially beleaguered households.

Edited by: Creamer Media Reporter
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