JOHANNESBURG - New vehicle exports dropped last month by 15.2 percent year-on-year to 26 790 units, with the National Association of Automobile Manufacturers of South Africa (Naamsa) warning that the domestic industry’s export performance was likely to be affected by current protectionist policies in the US.
Nico Vermeulen, the director of Naamsa, said yesterday that vehicle export sales for last month had been disappointing. Vermeulen said Naamsa continued to project growth in export sales over the balance of the year, but the industry’s export performance was likely to be affected by current protectionist policies in the US.
These policies had increased the risk of a global trade war and could impact on international trade flows, including vehicle exports, he said. South Africa’s automotive industry achieved total export sales of vehicles and components worth R164.9 billion last year, which represented almost 14 percent of total South African exports.
This enabled the domestic automotive industry to register its third consecutive annual trade surplus at R10.3bn, despite a 3.6 percent decline in the total export value from R171.1bn in 2016. Figures released yesterday revealed that domestic new car sales increased last month by 4.4 percent to 29 886 units from the 28 625 sold in June last year.
Total new vehicle sales rose by 4 percent to 46 678 units from 45 332 units in the same period.
Declined Sales of new light commercial vehicles, bakkies and minibuses declined last month by 0.4 percent year-on-year to 14 261 units, and medium commercial vehicles by 2.9 percent to 731 units. But sales of heavy trucks and buses increased by 10.1 percent to 1 800 units from 1 635 units in May. Vermeulen said the improvement in domestic new vehicle sales, particularly car sales, had exceeded expectations and was encouraging given recent weak economic growth and investment numbers. Vermeulen said it appeared that the new car market had been supported by improved business and consumer confidence.
He added that the contribution to new car sales by the vehicle rental industry had recovered substantially by 15.1 percent during the month on the back of fleeting replenishment.
An estimated 11 percent of total new vehicle sales last month represented sales to the vehicle rental industry compared to 7.3 percent in May this year. Vermeulen said the decline in the leading indicator of the Reserve Bank over the past two months suggested a challenging economic environment going forward. However, Vermeulen said new vehicle sales in the second half of the calendar year tended to show improvement on first half sales. Vermeulen said this reinforced Naamsa’s expectations of a modest annual improvement this calendar year in year-on-year domestic sales volumes.