New vehicle sales for July continued it growth path surprising many in the industry. Total vehicle sales were up by 18.3% compared to July last year as rental companies and corporate and government fleet representing nearly one fifth of sales for July. Year-to-date sales figures are up by 11.6% compared to the January to July period of 2010.
But the strong growth is expected to wane in the last quarter of the year.
Passenger car sales showed strong growth of 18.2% compared to July last year. But a slow down of sales of new cars is expected, in spite of the lowering of the interest rate last month.
The reduction of the interest rate is also not expected to create a big increase in vehicle sales
Manufacturers still believe that the total growth in sales for 2012 will be less than 10%. Vice president planning at General Motors SA Ian Nicholls says, “Global economic uncertainty has been significant, especially in Europe. We have been a little bit shielded from that in SA, partly because of the high level of marketing support and retail activity that is taking place in the motor industry, which is maintaining the sales momentum.”
Exports of fully built up vehicles also increased by 11.6% compared to the same time last year. The industry is even looking forward to increased exports as the year progress, particularly exports of light commercial vehicles.
But, the global economic outlook is not good leading to uncertainty for exporting manufactures.
NMMU Business School Economist Peter Grant says, “The economic situation is going to be tough going ahead. The factors influencing our market out of Europe and China. The fundamentals will take a long time to correct, we are looking at years of slow growth ahead.”
The reduction of the interest rate is also not expected to create a big increase in vehicle sales.