Car sales get off to quiet start

Cindy Preller

EASTERN Cape vehicle manufacturers were upbeat about the first sales figures of the year, despite tough economic conditions predicted for the year. Total vehicle sales released this week by the National Association of Automobile Manufacturers of South Africa (Naamsa) showed an increase from 46629 domestic sales in December to 53025 last month. But exports decreased 19.7% year on year and total sales slipped 6.8% compared to January last year.

Meanwhile, Toyota said last night it would invest R1-billion in production of its Corolla model in Durban. Analysts said the investment provided a vote of confidence to the sector after strikes last year.

Wage-related stoppages last year prompted BMW to freeze expansion and left others in the sector, which accounts for 6% of GDP, considering future investment.

On January sales, Naamsa attributed the low domestic year-on-year growth to a slowdown in the economy and rising interest rates.

The drop in exports was "in large part due to the lack of export sales by MercedesBenz SA as the firm retools for the production of the new model C-Class", Naamsa said. In December, MBSA sold 2778 vehicles in the domestic market and 2516 in January with no export sales.

The new model C-Class will be introduced in the second quarter.

Volkswagen Group SA in Uitenhage increased its domestic sales from 8172 last month to 10064 vehicles in January.

Group communications general manager Matt Gennrich said VWSA continued to dominate the passenger market last month with a 24.6% market share.

Gennrich cautioned: "Market conditions for 2014 will be more difficult than in 2013 as the embattled consumer comes to grips with a rate hike, increasing fuel prices and other inflationary factors. However, new model introductions and increasing numbers of tourists due to the weaker rand and who require rental cars, should help vehicle sales achieve similar levels to that of last year."

Gennrich said exports of the Polo and Polo Cross were expected to continue at similar levels to last year.

General Motors South Africa (GMSA) also increased total sales – from 4467 in December to 5112 last month.

Ford Motor Company of SA had a slight drop in total domestic sales, from 6055 in December to 5587, and an increase in exports from 2458 last month to 2768.

But the company said it had sold 45% more vehicles last month compared to January last year.

Its marketing, sales and service vice- president, Mark Kaufman, said 2014 would be another year of tremendous growth for the brand as it was rolling out 17 new global products by the end of 2017.

Ford had an 11.1% market share of sales with its Ranger sales growing 9.9% in December and 32%. – Additional reporting by Reuters