South African new vehicle sales registered substantial gains in the first month of the year, growing by 14.1% compared to the 48 202 vehicles sold in January last year, the National Association of Automobile Manufacturers of South Africa (Naamsa) reports.
This follows on a positive sales performance in 2012 as a whole.
On Monday, Naamsa said that all major segments recorded double digit year-on-year growth, with new cars growing by 12.3%, light commercials by 20%, medium commercials by 10.6, heavy trucks by 30%, and extra heavy trucks growing by 16.6%.
Export sales in January (at 17 399 vehicles) reflected an improvement of 5 794 vehicles or a gain of 49.9% compared to the 11 605 vehicles exported in January 2012.
Rental sales, pre-emptive buying
The association noted that continued strong demand by the car rental industry accounted for 22.5% of total new car sales during the month.
"Recent exchange rate weakness would have contributed to pre-emptive buying by consumers to avoid higher than expected new vehicle prices," it added.
Overall, out of the total detailed (disaggregated) reported industry sales of 52 775 vehicles (excluding Mercedes-Benz South Africa), 76.9% or 40 568 units represented dealer sales, 16.7% represented sales to the vehicle rental industry, 3.2% to government, and 3.2% to industry corporate fleets.
Discussions are ongoing between Mercedes-Benz SA (Pty) Ltd, Daimler AG, the Department of Trade and Industry and other stakeholders to facilitate the early resumption of full industry sales reporting. In the meantime, Mercedes-Benz South Africa will continue to provide a single total sales number.
Sales of vehicles in the medium and heavy truck segments of the industry, at an estimated 700 and 1 223 units respectively, recorded an increase of 67 units or 10.6% year-on-year in January.
In the case of medium commercial vehicles, there was a gain of 164 units or 15.5% compared to the corresponding month last year.
Exports up 49.9% year-on-year
South African new vehicle exports during January 2013, at 17 399 vehicles, registered substantial gains, rising by 5 794 units or 49.9% compared to the 11 605 vehicles exported in January last year.
The momentum of vehicle exports was expected to improve further over the balance of the year, particularly exports of light commercial vehicles.
The association noted that despite indications of slower growth in the economy, the performance of the South African automotive sector continued to surprise on the upside, with the overall near term outlook for the sector remaining reasonably positive.
"Factors that would continue to support domestic sales included the low interest rate environment, replacement demand, the highly competitive trading environment with attractive incentives, low debt servicing costs, high technology new model introductions and strong demand by car rental companies," Naamsa said.
However, on the negative side, rising inflationary pressures would limit growth in real disposable income which, together with generally anticipated rising new vehicle prices as a result of the weaker exchange rate, could result in some moderation in the rate of growth in sales over the balance of the year.
"Industry production, largely as a result of higher new vehicle exports, should however register encouraging growth in 2013," said Naamsa.
Nedbank economists said that the market had performed relatively well against the backdrop of weak momentum in the overall economy.
"Overall, economic activity remains generally sluggish, while upside risks to inflation have increased due to a weaker rand," the bank said. "We believe that this will compel the [Reserve Bank's] monetary policy committee to keep monetary policy neutral over an extended period, with interest rates remaining unchanged for most of 2013.
"A reversal in policy easing is likely only late in the year or even in 2014. However, deterioration in both the global and domestic economies would increase the chance of another cut," the bank said.