Statistics released by the Department of Trade and Industry show that South Africa’s new-car market was down 10.4% for the first half of the year, compared with the first six months of 2015.

Light commercial vehicle (LCV) sales declined by 8.9% in the first half of 2016, while medium commercial vehicle sales were down 19%, with sales of heavy trucks and buses dropping by 4.4%.

Total sales for the month of June continued the downward trend seen since January, declining by 10.6%, compared with the same month last year.

June new-car sales, at 29 070 units, dropped by 11.7%.

The car rental sector accounted for 16.8% of car sales during the month.

June sales of new LCVs, at 13 398 units, declined by 9.7%, while sales of medium trucks, at 779 units, dropped by 8.4%.

New heavy-truck and bus sales provided the only upside during June, increasing by 2.6% to 1 692 units.

Export sales of new vehicles during June declined by 1.4% to 30 965 units.

The National Association of Automobile Manufacturers of South Africa (Naamsa) says the momentum of new-vehicle exports should improve during the second half of the year as a result of an expected increase in LCV exports to Europe.

On the domestic front, the association believes the underlying trend in new-vehicle sales continues to reflect progressive and steady weakness, with domestic sales expected to remain under pressure over the short to medium term.

“Subdued levels of economic activity, above-inflation new-vehicle price increases, low levels of consumer confidence and lower finance approvals would continue to weigh on domestic new-vehicle sales during the second half of the year.”

However, adds Naamsa, a number of “key economic indicators appears to be moving in the right direction”, including the improvement in South Africa’s trade balance and lower-than-anticipated producer price inflation.

“This augured well for interest rate stability over the medium term. A further positive feature is the welcome rise in the Barclays Purchasing Managers Index, a leading economic indicator, which has now remained above the 50-point mark for the last four months. This heralds a possible improvement in business activity and the economy in coming months.”