Vehicle sales rise modestly off a low base, while exports surge
Truck sales finally showed some fight in May, after a disappointing start to the year. Sales of light commercial vehicles rose 3.2% from May 2017, medium commercials 17.6%, heavy trucks 6.1%, and extra-heavies 23.9%.
Car sales, usually the growth driver, managed only a 0.7% improvement, from 26,382 to 26,561. As a result, the overall new-vehicle market grew a modest 2.4%, from 41,962 to 42,984.
The National Association of Automobile Manufacturers of SA (Naamsa), says the commercial vehicle figures suggest "the return of positive investment sentiment and business confidence". Others say it is too early to draw conclusions from an overdue positive performance.
Industry sales figures were published on Friday by the Department of Trade and Industry. They show that over the first five months of 2018, sales of all categories of new vehicles were down 1.6% compared to a year earlier, from 224,333 to 220,783. Naamsa, however, believes the full-year 2018 market could grow 3%, courtesy of "continued moderation in new-vehicle price inflation, the improvement in SA’s political and policy environment, the March 2018 reduction in interest rates and unchanged international credit ratings".
Exports of South African vehicles grew by 13.9% in May, to 42,984. With BMW ramping up production of its new, export-focused X3 vehicle, most analysts expect further improvements in the coming months. Naamsa, however, warns that the latest, US-driven wave of trade protectionism could yet have an effect on export demand.