Car sales crash
The motor industry fears that any further tightening in monetary policy could result in production cuts, business closures and job losses, according to the National Association of Automobile Manufactures of South Africa (Naamsa).
The motor body cautions the monetary authorities to be aware of the current socio-political and economic challenges facing South Africa and the resulting implications in terms of consumer and business confidence.
Higher interest rates are impacting on dealers, importers and distributors.
Total vehicle sales in May reported to Naamsa fell to 39533, a decline of 23,4percent on the same month last year, while new car sales were 22647 or a decline of 28,1percent.
Sales for the first five months of the year are now down 19percent on the same period last year. Taking into account sales by importer Associated Motor Holdings, sales were down to 43214, or 28,7percent lower.
Light commercials faired little better with sales at 13992 showing a drop of 17,2percent.
For the first time in many months, sales of medium commercials fell by 33,7percent to 912, but heavy trucks continued to improve with a gain of seven percent to 1982.
Factors impacting on the poor showing in May were interest rate hikes, inflationary pressures, high debt levels and the slowdown in the economy.
Car sales were at their lowest level since December 2004.
The last time May sales were lower was in May 2004, said Brand Pretorius, chairman of McCarthy Motor Holdings.
Reduced sales volumes, shrinking margins and high funding costs had already resulted in the closure of a number of dealership and used car outlets, he said.
With an almost guaranteed interest rate rise next week the current sales pace was expected to continue for the rest of the year, said Jacques Brent, vice president of sales and marketing at Ford.
Increased export volumes have, however, kept manufacturers and component producers in business.