South Africa’s new vehicle sales jumped 22,2% last month from the previous year, as interest rate cuts since late 2008 boosted demand, although the economic environment still posed a challenge for the sector.
Total industry vehicle sales totalled 44 055 units last month, the National Association of Automobile Manufacturers (NAAMSA) said on Tuesday.
When stripping out sales from Associated Motor Holdings and Amalgamated Automobile Distributors, which report, separately, sales rose by 18,3% to 37 383 units compared with October last year, NAAMSA said.
“The 6% decline in interest rates since end-2008, stable new vehicle prices, modest improvement in loan finance approval rates and pent-up replacement demand should continue to support new vehicle sales,” NAAMSA said in a statement, adding however:
“Certain domestic economic performance indicators such as the purchasing managers’ index (PMI) . . . suggested that domestic economic conditions would remain challenging.”
NAAMSA said exports of new vehicles were up 30,5% at 27 338 vehicles last month, compared with exports in the same month last year.
This was an increase of 118,1 % over September, when both domestic sales and exports were hit by an industrial strike which eroded output.
Despite the improvement in vehicle sales, data on Monday showed South Africa’s PMI stayed below its break-even point last month.
The PMI data, combined with numbers last week showing a brake in inflation, could persuade the Reserve Bank to cut rates again at its last policy meeting for the year on November 17 and 18.