December blues hit vehicle sales figures

Last month again failed to provide much in the Christmas stockings of vehicle sellers in South Africa because a decline of 15,1 percent year-on-year to 41,813 units was recorded.

Last month again failed to provide much in the Christmas stockings of vehicle sellers in South Africa because a decline of 15,1 percent year-on-year to 41,813 units was recorded.

Some analysts feel this may reduce the likelihood of further monetary tightening, while others expect one more cautionary hike either this month or on April 10.

Despite the traditionally dismal December due to seasonal factors, the low growth also reflects the continuing difficult trading conditions in South Africa as the new credit regulations and high interest rates combine to knock demand in the passenger market.

The low growth was not unexpected by the market, as analysts foresaw demand continuing to be affected by these twin factors.

Independent analysts said: "The vehicle sales figures provide further indication of real consumer demand. Consumer spending came under pressure in November, and further signs of a moderation in December will hopefully reduce the likelihood of further monetary tightening."

Vehicle sales were at a negative 13,8percent year-on-year in November and passenger sales were down 15,7percent. A decline in total sales of 13,2percent had already been seen in September.

Lower consumer demand was generally seen as toning down the central bank's rhetoric in this regard at their December 6 meeting. The main bugbear, however, remains inflation, currently surging at 7,9 percent year-on-year and comfortably in double digits on the food front.

Compounding the problems in the vehicle sector were e-NaTIS vehicle registration hiccups, and component supply disruptions due to strike action.

The only shining light for the industry this year is likely to be the heavy commercial and truck sector as the infrastructure drive steams ahead.

NAAMSA said that heavy commercial vehicle sales had held up "relatively well". Medium and heavy commercial vehicle markets reflected a year-on-year improvement of 19,5percent and 8,1percent respectively, relative to the corresponding month in the previous year. The data showed that a total of 612707 units were sold last year - a decline of 5,2percent over the previous year.

This brings to an abrupt halt the good times, which have been rolling for four successive record years, though the industry's overall sales last year did represent the second-highest annual sales total on record.

The upcoming decision by the central bank seems to be getting tougher by the day.

The Toyota Yaris emerged as the front runner in last month's new passenger vehicle sales with 3357 sold, and in the light commercial vehicle division the Toyota Hilux sold 3078 vehicles. - I-Net Bridge

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