BuaNews (Tshwane)

South Africa: Vehicles Sales Surge in May

Pretoria — Vehicle sales surged in May, rising by 20.7% to 50 229 from 41 625 units in May 2011, the National Association of Automobile Manufacturers of South Africa (Naamsa) said.

The 20.7% growth was above the growth rate in industry total sales of 9.4% for the first five months of the year.

New car sales in May were strong at 34 820 units (including Mercedes Benz South Africa). This was an improvement of 20.8%, compared to the 28 821 new cars sold in May 2011. The strong sales were assisted by new model introduction and an improvement in stock availability.

"The year-on-year growth momentum in May new car sales had improved, rising to its best level in the past eight months with year-to-date new car sales -- 11.3% ahead of the corresponding five months of 2011. New car sales during May 2012 recorded the highest daily selling rate since June 2007," said Naamsa.

Overall, out of the total reported industry sales of 47 717 vehicles, excluding (MBSA), 90.3% represented dealer sales; 4.3% represented sales to the vehicle rental industry; 3.8% to industry corporate fleet sales and 1.6% sales to government.

"From a seasonal perspective, sales to car rental companies should improve from June 2012 onwards as the car rental industry started to re-fleet," noted Naamsa.

According to the association, MBSA for the time-being would provide a single total sales number for passenger cars, commercial vehicles and export sales.

MBSA received a global directive by parent company Daimler AG, Germany, instructing it not to report disaggregated sales data for the time-being.

Including estimates for MBSA commercial vehicle sales by segment, sales of industry new light commercial vehicles, bakkies and mini buses at 12 907 units in May reflected an increase of 2 287 units or 21.5% compared to the 10 620 light commercial vehicle sales during May 2011.

Sales of vehicles in the medium and heavy truck segments of the industry, at an estimated 881 and 1 621 units, recorded an increase of 135 units or 18.1% in the case of medium commercial vehicles and a 12.7% increase in the case of heavy trucks and buses, compared to the corresponding month last year.

According to the association, most manufacturers in these sectors reported strong order books going forward.

Exports of South African produced motor vehicles, including MBSA, at 22 620 registered an improvement of 560 units or 2.5%.

Meanwhile, industry export sales were expected to improve over the balance of the year.

"The industry's export performance would remain a function of the direction of the global economy. Vehicle exports into Europe were likely to continue under pressure as a result of the recession and debt crisis in the Eurozone," noted the association.

The on-going improvement in the financial position of consumers, low interest rates, continuing improvement in vehicle affordability and new model introductions among others will lend support to the domestic market.

"Continued growth in consumer expenditure and public sector infrastructural investment would also support domestic new vehicle sales. The recent sharp depreciation in the exchange rate was also likely to result in pre-emptive buying over the next few months as consumers sought to purchase vehicles to avoid the possible impact of the lower exchange rate on new vehicle prices."

Standard Bank economists said the data could inject some optimism.

"Given the backdrop of sluggish domestic economic data of late, today's data may inject some optimism in the current environment of growing doom and gloom. Vehicle exports are expected to take a back seat as demand from Europe is hindered by turmoil in that region," said the bank.

BuaNews

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