New vehicle sales plunge

SOUTH African new vehicle sales took another pounding last month. Figures released yesterday by the Department of Trade and Industry show that sales in March fell 14% compared to a year earlier‚ from 55 389 to 47 631.

As a result‚ numbers for the first quarter of this year make grim reading. New vehicle sales in the first three months were down 10%‚ from 160 002 to 144 352.

Exports of vehicles manufactured in South Africa also suffered last month, dropping 18.5%‚ from 34 025 to 27 714.

Industry executives are standing by their forecasts that full-year 2016 exports will exceed last year’s total – but after the first quarter they are down 13%‚ from 80 510 to 70 028.

There is reason for their optimism. One of South Africa’s main exports‚ the Toyota Hilux‚ has just undergone a model change at Toyota’s Prospecton assembly plant in Durban.

Production of the old model wound down before last month’s launch of the new Hilux. Consequently‚ March exports of the product‚ at 1 549‚ were about a quarter of typical monthly levels.

There were also mitigating factors in the local market‚ where new car sales last month fell 13.4% year on year.

With the Easter holidays falling in March‚ and not April as in 2015‚ dealers lost several selling days. Nevertheless‚ there is no hiding the problems facing the motor industry in South Africa.

Last month’s hike in interest rates dealt a further blow to consumers’ already limited ability to afford new vehicles.

A National Automobile Association of South Africa statement yesterday said: “Against the background of a difficult economic environment and low gross domestic product growth prospects‚ the likelihood of double-digit new vehicle price increases as a result of rand weakness‚ and possible further interest rate hikes‚ the outlook for 2016 in terms of new vehicle sales remains unfavourable. Furthermore‚ the full impact of the drought on the economy is still to manifest itself.”