The sale of new vehicles remained under pressure in June, the National Association of Automobile Manufacturers of SA (Naamsa) said on Thursday.

New vehicle sales for June 2009 at 30 065 units reflected a decline of 9347 vehicles or 23.7 percent compared to the 39 412 units sold during corresponding month last year, Naamsa said in a statement.

Factoring in aggregate vehicle sales reported by the AMH Group, the year-on-year decline amounted to 22.6 percent.

Out of the total of industry sales of 30 065 vehicles reported by Naamsa, 80.7 percent or 24 258 units represented dealer sales and 10.6 percent sales were to the car rental industry.

Some 4.8 percent of sales represented automotive industry corporate fleets and 3.8 percent sales were to government.

At the halfway mark of June, aggregate industry new vehicle sales for 2009 had declined by 33.8 percent with 190 245 units compared to the 287 454 vehicles sold during the corresponding six months of last year, Naamsa said.

For June 2009, new car sales at 19 035 units reflected a decline of 4015 units or 17.4 percent compared to the 23 050 new cars sold during June 2008, Naamsa said.

Factoring in aggregate new car sales reported by the AMH Group, the year-on-year decline amounted to 4540 units or a fall of 17.6 percent.

"Importantly, the rate of decline in the new car sales cycle has slowed during the month of June and over recent months giving rise to optimism that the new car market will start to bottom out in coming months," Naamsa said.

Sales of new light commercial vehicles, bakkies and minibuses at 9490 units during June 2009 reflected a decline of 3654 vehicles or 27.8 percent compared to the 13 144 units of the corresponding month last year, Naamsa noted.

Taking account of the light commercial vehicle sales reported by the AMH Group, the year-on-year decline amounted to 3444 units or 25.1 percent, Naamsa said.

Sales of vehicles in the medium and heavy truck segments of the industry — with the exception of the bus sector — remained weak.

The June 2009 sales at 499 units and 1041 units, respectively, registered a massive decline of 578 units or 53.7 percent, in the case of medium commercials and 1100 units or 51.4 percent, in the case of heavy and extra heavy trucks and buses, when compared with the corresponding month last year.

Naamsa said sales of new buses at 120 units had shown a welcome improvement of 23 units or 23.7 percent compared to the 97 reported sales in June last year.

"The ongoing weakness in medium and heavy truck sales reflects lower investment spending as well as difficulties experienced by truck operators in accessing loan finance," Naamsa added.

In June, lower levels of demand in South Africa's major export markets contributed to a huge decline in the number of vehicles exported by the industry.

Naamsa said export sales at 11 760 vehicles had registered a decline of 13 006 vehicles or a fall of 52.5 percent compared to the 24 766 vehicles exported during June last year.

Export sales for June 2009 had also declined from the previous month of May 2009 — falling by 1833 units or 13.5 percent month-on-month.

"All sectors of the South African automotive industry, vehicle retail, auto parts manufacturing and vehicle producers — continued to experience severe and unprecedented sustainability challenges.

"Any improvement in the automotive industry's domestic operating environment will depend on a revival in consumer spending on the back of lower interest rates as well as on stimulatory government expenditure," Naamsa said.

Improvement in vehicle exports would depend on a recovery in global economic conditions and a return of confidence in international financial markets, Naamsa added.

Most current indicators continued to reflect an economy under pressure.

However, Naamsa said, in a number of instances there were signs of some improvement or consolidation.

In the circumstances, it was anticipated that new vehicle sales volumes would start to consolidate at current levels over coming months with an improvement in domestic sales materialising towards the end of 2009 and into 2010.

"Given the current worldwide vehicle production over capacity, a recovery in sales to export markets was unlikely to eventuate until later in 2010 or even 2011," Naamsa said.

Sapa

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