New vehicle sales surge 6.2% in July in ‘encouraging turnaround’
The industry sold 30,826 cars last month, with vehicle exports leaping 22.2% compared to the same period in 2016
Local and export sales of new vehicles surged in July, bringing respite to motor companies for which 2017 has mostly been a difficult year. A 6.2% increase in new car sales in July was an "encouraging turnaround", the National Association of Automobile Manufacturers (Naamsa) said on Tuesday.
The motor industry sold 30,826 cars last month, compared to 29,035 in the same month a year earlier. As a result, sales for the first seven months of 2017 narrowed the deficit on the corresponding 2016 period to 1%, from 207,601 compared to 209,673.
There’s even less of a gap to bridge in the overall new vehicle market, which includes trucks and buses. Figures from the department of trade and industry show that total sales last month grew 4.1%, from 44,870 to 46,719. Consequently, aggregate sales for the first seven months are only 0.3% behind 2016 at 316,386 compared to 317,234.a
Cars, however, must take most of the credit. Light commmercials, mainly bakkies, improved 1.7% in July but heavier trucks and buses all struggled.
Last month’s interest-rate cut came too late to have a significant impact on sales but Naamsa said it should provide "some relief for hard-pressed consumers".
Progressive improvements in SA’s trade balance should support the exchange rate which would, in turn, reduce pressure for price increases. Naamsa predicted that the overall market for 2017 would be close to last year’s 547,174.
Vehicle exports leapt 22.2% in July compared to a year earlier, from 29,030 to 35,486. Unlike this time last year, when at least one manufacturer was ramping up volumes after product changes, manufacturers are currently all busy meeting foreign orders.
Thanks to last month’s progress, exports for the year so far are only 3.1% behind 2016, at 190,722 compared to 196,727.
Naamsa said "the momentum of vehicle exports is expected to improve further over the balance of 2017". In plain speak, most analysts expect the industry to exceed last year’s export record of 344,822.