Exports ease strain on vehicle market
The vehicle market, which is showing serious signs of strain, is expected to record sales which are down by between 15percent and 35percent for May, compared to the same period last year.
The National Association of Automobile Manufacturers of South Africa (Naamsa) reports vehicle sales tomorrow.
In the first four months of this year car sales were down 15,4percent, light commercials lower by 6,5percent, medium commercials up by 10,5percent and heavy trucks better by 9,8percent.
Nico Vermeulen, executive director of Naamsa said that, "all one can say is that we are going through extremely difficult times.
"The automobile industry is cyclical, but the severity of the decline is unprecedented. The market has almost gone over the cliff. We have never experienced such a troubled time as this. The market is down and out," said Vermeulen.
Factors putting pressure on the market are tight monetary conditions, rising inflation, high levels of household debt and a slowdown in the economy.
The saving grace has been that most of the manufacturers have large export orders and that is keeping production at almost record levels as they meet global demand.
A factor of household debt has been the large number of vehicle repossessions by finance houses such as Stannic, WesBank, Nedbank and Absa. It is estimated that about 5000 vehicles are being repossessed each month.