Weak economy continued to exact toll on new-vehicle sales in April

19th May 2017

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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A tough economy and a slew of public holidays, leading to fewer selling days, both took their toll on domestic new-vehicle sales in April, which, at 34 956 units, were down 5 392 units, compared with the same month last year.

Sales numbers released by the Department of Trade and Industry show that new passenger car sales declined by 13.7% in April to 22 452 units.

Sales of new light commercial vehicles, bakkies and minibuses, at 10 592 units, declined by 13.3%.

Sales of medium-sized trucks, at 562 units, dropped by 3.8%.

New heavy truck and bus sales contracted by 12.1% to 1 350 units.

New-vehicle exports from South Africa also registered a sharp decline in April, dropping 25.5% to 24 449 units.

The National Association of Automobile Manufacturers of South Africa (Naamsa) notes in a statement that the outlook for new-vehicle sales “turned negative on the back of the extraordinary political events at the end of March”, following modest improvements in sales during the first three months of the year.

President Jacob Zuma on March 30 sacked Finance Minister Pravin Gordhan, as well as Deputy Finance Minister Mcebisi Jonas, in a wide-ranging Cabinet reshuffle.

This was followed by a number of calls for Zuma to resign, including from those within the governing tripartite alliance.

Political and social polarisation in South Africa, together with prospects for lower domestic economic growth over the short to medium term, is weighing on business confidence and consumer sentiment, says Naamsa.

“At this stage, the risk for new-vehicle sales is on the downside.”

The association is a bit more upbeat about exports, however.

“Indications for the global economy are reasonably positive, with the latest International Monetary Find projections anticipating global growth at around 3.6%.

“This will benefit vehicle exports to Europe, Australasia, the US and South America.

“Naamsa anticipates that export sales will register upward momentum over the balance of 2017, thereby continuing to contribute positively to South Africa’s trade balance.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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