Crash in vehicle sales the worst in 20 years

Bob Kernohan BUSINESS EDITOR

VEHICLE sales crashed on all fronts – including all classes of commercials and exports – last month, the latest industry figures released yesterday showed.

The monthly decline was the biggest in more than two decades, while total sales were the lowest for the month of February for six years.

And with rapidly increasing prices, which rose by 9,4 per cent in January alone, there is no end in sight to the downturn.

The figures, released by the National Association of Automobile Manufacturers (Naamsa) and major dealer network and import group Associated Motor Holdings (AMH), showed that:

Passenger car sales decreased by 33,3% to 20406 from 30613 in February last year;

Sales in the light commercial vehicle segment dropped to 10118 – a 39,6% decline;

Medium commercial vehicle sales decreased by 28,5% to 898; and

Heavy vehicle segment sales decreased by a dramatic 41,4% to 1144.

“The total vehicle market reached sales of 32566 units during February, which represents a dramatic drop of 35,6% when compared to the February 2008 sales of 50560 units,” said AMH chief executive and industry veteran Brand Pretorius.

“Year-to-date, the new vehicle market is down 36,2% and even the traditionally more robust commercial vehicle segment has declined by almost 40%, highlighting the seriousness of the current downturn in the economy.”

Exports of 14949 domestically produced vehicles last month were also down by 5668 units, or 27,5%, compared to the 20617 shipped abroad last February.

Naamsa, which is part of a task team trying to get a reported R10-billion in rescue package funds from the government for some vehicle manufacturers and component makers, said the industry was experiencing “unprecedented deterioration”.

Voicing widespread opinion in the industry, Naamsa said sales of new vehicles “are expected to remain under pressure in the short term”, although there could be “some improvement” during the second half of this year.

But the association added: “Any improvement in international trading conditions and new vehicle export sales will only materialise once the severe current global economic and financial crisis abates. It is anticipated any recovery would only eventuate in 2010 or 2011.”

Under prevailing conditions, there were a few bright spots for Eastern Cape manufacturers.

One was that Volkswagen SA led the new car market for the fourth consecutive month, with sales of 4117, earning the Uitenhage-based company a market share of 20,2%.

Sales and marketing director Mike Glendinning said the Polo/Classic was again the country‘s “favourite car”, with sales of 1588.

But Glendinning did reflect industry-wide price increases, caused by and large by the drop in the value of the rand.

“Adding to the pressure on sales is rapid growth in new vehicle prices which escalated by 9,4% in January and which are expected to grow even more rapidly in coming months.”

General Motors SA also found a touch of silver in the lining of the gloomy clouds hanging over the industry, pointing out that the Opel Corsa Utility had continued its 46-month run as the best selling sub-one tonner with 975 sold.

Sales and marketing director Malcolm Gauld said the Bay-based company‘s “already conservative” forecast of a total market of 400000 for this year “looks to be on the high side”.

One of the reasons for this was that even interest rate cuts were “unlikely to have any effect on new vehicle sales until very late in 2009, if at all”.

Toyota were again the top manufacturer overall, with a market share of 22,9% with 7453 sales. The company sent 6802 vehicles to international markets for a 45,5% share of export sales. In the combined domestic and export market Toyota accounted for 30% of sales, with the Hilux top seller.

source: The Herald

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