South African new vehicle sales grew by 20.7% year-on-year in May, climbing to their highest level in a year, the National Association of Automobile Manufacturers of South Africa (Naamsa) reported on Monday.
The total number of cars sold jumped to 50,229 from 41,625 units in May 2011. It was also above the growth rate in industry total sales of 9.4% for the first five months of this year.
New car sales in May were strong at 34,820 units, an improvement of 20.8% compared to the 28,821 new cars sold at the same time last year. Strong sales were assisted by new model introduction and an improvement in stock availability.
“The year-on-year growth momentum in May new car sales had improved, rising to its best level in the past eight months, with year-to-date new car sales 11.3% ahead of the corresponding five months of 2011,” Naamsa said in a statement.
“New car sales during May 2012 recorded the highest daily selling rate since June 2007.”
Out of the total reported industry sales of 47,717 vehicles, 90.3% represented dealer sales, 4.3% sales to the vehicle rental industry, 3.8% industry corporate fleet sales, and 1.6% sales to government.
“From a seasonal perspective, sales to car rental companies should improve from June 2012 onwards as the car rental industry starts to re-fleet,” noted Naamsa.
Sales of new light commercial vehicles improved 21.5% from last year, while the medium and heavy truck segments recorded an 18.1% and 12.7% increase respectively.
Most manufacturers in these sectors reported strong order books going forward.
Exports of South African-produced motor vehicles also showed improvements, with a 2.5% increase from 22,060 vehicles in May 2011 to 22,620 this year. Industry export sales were expected to improve over the balance of the year.
The ongoing improvement in the financial position of consumers, low interest rates, continuing improvement in vehicle affordability and new model introductions would lend support to the domestic market, Naamsa predicted.
“Continued growth in consumer expenditure and public sector infrastructural investment would also support domestic new vehicle sales,” the organisation said.
“The recent sharp depreciation in the exchange rate was also likely to result in pre- emptive buying over the next few months as consumers sought to purchase vehicles to avoid the possible impact of the lower exchange rate on new vehicle prices.”