New-vehicle sales in July increased 4.1% compared with the same month last year, to 46 719 units.

Sales numbers released by the Department of Trade and Industry on Tuesday showed that new passenger car sales increased by 6.2%, to 30 826 units.

Sales of new light commercial vehicles, bakkies and minibuses, at 13 774 units, also showed positive momentum, gaining 1.7%.

The National Association of Automobile Manufacturers of South Africa (Naamsa) welcomed what it called an “encouraging turnaround”, following a bruising few months in the automotive industry, with poor economic conditions taking their toll on consumers.

New-vehicle exports also showed growth in July, jumping by 22.2%, to 35 486 units.

The momentum of vehicle exports was expected to improve further over the balance of 2017, noted Naamsa.

It was not all good news, however.

July sales of new medium trucks, at 598 units, dropped by 16.1% in the domestic market.

New heavy truck and bus sales contracted by 3.7%, to 1 521 units.

“The domestic automotive industry is holding up relatively well in the current difficult economic environment,” said Naamsa.

“Domestic new-vehicle sales are closely correlated with the overall performance of the economy and confidence levels. 

“The fundamental challenge confronting the country at present was lack of confidence, on the part of business and consumers. Concerted steps are required by business, government and labour to create a more investor-friendly environment as a means of boosting growth.”

The association believed the recent 25 basis-point reduction in interest rates should provide some relief for hard-pressed consumers, while the progressive improvement in South Africa’s trade balance over the past two years would support the exchange rate, which, in turn, would moderate new-vehicle price inflation. 

Naamsa said it anticipated the 2017 new-vehicle market to end the year relatively flat compared with 2016.