NEW vehicle sales continued their downward trend in August with a 26,2percent drop from a year ago.

According to the National Association of Automobile Manufacturers of South Africa's (Naamsa) data, a total of 29667 vehicles were sold last month compared to more than 40000 units in August last year.

Since the 2006 peak of 60000 units sold in August, car sales have been on a decline which accelerated this year when the sub-prime credit crisis toppled world markets.

August sales were marginally (3percent) lower than July sales of 30700 vehicles.

"Encouragingly the selling rate of total new cars per day during August 2009 improved by 9,8percent compared to the previous month of July 2009," Naamsa said.

This was a result of August having fewer working days.

Medium and commercial vehicles showed the biggest year-on-year decline of 51percent, but export sales were the hardest hit. Exports were down 66,7percent.

Chief executive of McCarthy Motor Holdings Brand Pretorius said: "We were somewhat disappointed with the August figures, since July was showing signs of improvement.

"The market is scraping along at the bottom, but at least sales haven't shown serious declines," he said.

He said September would show solid improvements as companies begin fleet procurement in anticipation of next year's influx of tourists, but he expects the first turning point in the private market to happen in the first quarter next year.

Managing executive of Absa's vehicle and asset finance division Marcel de Klerk said the continued slowdown in economic activity, especially in manufacturing, mining production and residential construction, continued to impact on commercial vehicle sales.

He said sales would improve by between one and three percent month-on-month before showing significant increases in 2010.