Bheki Mpofu
3 December 2008
Johannesburg — THE South African car manufacturing sector remained depressed last month, with new vehicle sales recording a 28,3% monthly decline compared to the same period last year, adding to a slew of similar bad news in the US, Europe and Asia.
The significant weakening in sales in all segments of the local new vehicle market suggests that conditions in the local economy have continued to deteriorate due to a global economic slowdown and weaker domestic consumer spending. It is also a reflection of the grim state of the global car industry, with reports of production cuts and tumbling sales in Europe, Asia and the US.
South African new sales fell to 34176 units last month, compared to the 47673 vehicles sold during the corresponding month last year, with passenger car sales alone tumbling 33,6% over the previous year -- the worst monthly new car performance in five years -- according to figures released yesterday by the National Association of Automobile Manufacturers (Naamsa) .
Sales for the first 11 months of this year were 20,7% lower than the sales recorded during the corresponding 11 months last year, with sales for the full year expected to be about 21% down.
Sales of vehicles in the medium and heavy truck segments, which have until now been resilient, also registered sharp falls last month -- with medium commercials declining 30%, and heavy trucks and buses down 20,6%.
"The figures are abysmal and shocking. They reflect an industry experiencing severe weaknesses in the domestic market," Naamsa director Nico Vermeulen said.
"The new vehicle sales market in general is in distress, and we are also starting to see serious weaknesses in the heavy truck market, which shows that fixed investments are coming under pressure."
The dismal performance of the local new vehicle sales market comes as Germany, Europe's largest car market, said yesterday new vehicle sales had dropped 17,6% last month from a year ago, adding to a string of similar news across the continent.
In response to the global economic downturn, Japan's Toyota Motor, the world's biggest car manufacturer, and Tata Motors, India's biggest, both revealed new production cuts to avoid a build-up of unsold stock.
Earlier in the week, Spanish figures showed car sales there had almost halved in November, while French, Belgian and Italian markets also shrank. Italy forecast yesterday that next year would be worse still, with a 13,5% fall in new car sales there. In the US later this week, the country's top car manufacturers are again expected to urge Congress to approve a bail-out to help them survive the crisis.
Vermeulen said yesterday that the local car sector was being boosted by the continued growth in the export sector, which showed a record growth of 86% last month. This was lending support to components and local vehicle manufacturers, he said.
He warned, however, that there was likely to be some weakness in exports in coming months as the US, Europe and Japan were expected to experience a reduction in demand.
He said indications were that, overall, new vehicle exports next year could decline about 15% on this year's figure. With Reuters
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