Year-to-date new domestic vehicle sales increased by 5.9% year-on-year, while total vehicle sales for August, of 56 115 units, reflected a decline of 0.3%, or 155 vehicles, on that sold in August last year, data released by the Department of Trade and Industry, on Monday, showed.

Export sales registered a decline of 22.9% in volume terms in August.

The National Association of Automobile Manufacturers of South Africa (Naamsa) stated that the August sales figures were largely in line with industry expectations.

“By virtue of existing inventory levels in the industry, the impact on domestic sales of the current industrial action at the seven major vehicle manufacturing plants has, to date, been muted. The main impact of the strike action to date has been on the industry’s export performance and particularly the export operations of BMW and Ford Motor Company, which have been negatively affected owing to other industrial action which preceded the current industry strike, that is now in its third week,” Naamsa stated.

The association added that the full negative impact of the industrial action would be reflected in the September domestic sales and particularly in industry export numbers.

Of the total reported industry sales, 82.8% represented dealer sales, 11.4% represented sales to the vehicle rental industry, 3.3% to industry corporate fleets and 2.5% to government.

During August, 38 892 new cars were sold, which marked a decline of 3.7% compared with the 40 379 new cars sold in the corresponding month last year.

Meanwhile, sales of industry new light commercial vehicles, bakkies and minibuses, at 14 376 units, reflected an increase of 726 units, or 5.3%, compared with the 13 650 light commercial vehicles sold during August last year.

Sales of vehicles in the medium and heavy truck segments, at 1 038 units and 1 809 units respectively, recorded an increase of 24% in the case of medium commercial vehicles, and an increase of 28.8% in the case of heavy trucks and buses, compared with the corresponding month last year. 

“The excellent performance in sales of light, medium and heavy trucks suggested higher levels of investment spending in the economy and was, in part, related to infrastructural development projects,” Naamsa said.

Meanwhile, Standard Bank head of vehicle and asset finance Sydney Soundy pointed out that, while sales during the month of August was 3.51% lower than that of July, the month had still surpassed the average monthly sales and is currently the second-best sales month of this year.

Naamsa added that, despite a less promising outlook for the automotive sector for the balance of the year, the year as a whole would still represent the second or third best year on record in terms of domestic sales.

The prevailing low interest rate environment would continue to lend support to the domestic market together with replacement demand, the highly competitive trading environment, ongoing attractive incentives and high technology new model introductions.

Soundy added that vehicle sales volumes could also still be boosted by the vehicle price inflation for the second quarter of this year, which had, to date, remained below the consumer price index.

“However, the rand has been under pressure against all major currencies, which will have a negative knock-on effect on vehicle price inflation (VPI),” he said, adding that VPI on new cars had increased quarter-on-quarter to 3%, compared to 2.4% in the first quarter of this year.

Factors that were expected to have a dampening effect on vehicle sales numbers included the expected low gross domestic product growth, labour disputes that have halted production in the motor industry, as well as potential labour disputes in the retail motor industry.

Further, the volatility in the exchange rate would have a negative impact on consumer disposable income and the pressure being faced by the mining and construction industry would affect commercial vehicle sales, Soundy said.