Photo by: Bloomberg
A prolonged strike in the metal and engineering industry would increase the risk of the South African economy moving into a recession, the National Association of Automobile Manufacturers of South Africa warned on Tuesday, as it released the latest vehicle sales statistics.
The association pointed out that labour unrest would further undermine investment sentiment and, if the industrial action continued beyond two weeks, it would impact on vehicle production and exports.
The local economy continued to experience pressures in the form of slower economic growth, high levels of industrial action, rising inflationary pressures and exchange rate vulnerability.
However, domestic new vehicle sales had shown some resilience during the month of June.
New vehicle sales registered a “modest” 2.3% decline of 1 251 vehicles, from 54 088 vehicles sales in June 2013, to 52 837 vehicles sold in June this year.
Export sales for June reached 24 024 units, marginally down from the 24 219 vehicles exported in June last year.
South Africa’s new passenger car market had remained under pressure during the month, with the sale of 35 355 units reflecting a 5.4% fall on the 37 372 new cars sold in the corresponding month in 2013.
During the month under review, domestic sales of new light commercial vehicles, bakkies and minibuses, at 14 556 units, showed some recovery, with a 4.5% increase compared with the 13 935 light commercial vehicles sold in June 2013.
Medium commercial vehicle sales fell 10.4% year-on-year; however, heavy trucks and bus sales recorded a strong gain of 14.7%.