June car sales continue to show slowdown in rate of decline

New passenger vehicle sales for June have yet again indicated that consumers remain under severe pressure to afford new vehicles, but that the rate of year-on-year decline continues to ease. According to the latest figures released by NAAMSA today, total new passenger car sales for June 2009 showed a 22,6% decline year-on-year, compared to 39% in April and 26% in May.  A further positive sign can be found in June’s 12.9% improvement in sales over last month.

“The continued high level of consumer indebtedness remains one of the major reasons for the new vehicle sales market to keep stumbling along in its deflated state” says Chris de Kock, Executive Head of Sales and Marketing at WesBank. “It is now becoming clear to industry players that our market will drag along the bottom for quite a bit longer than we originally anticipated” continues de Kock.

The positive signs contained in June’s numbers also need to be seen within the context of the 2008 market performance. “One has to bear in mind that trading conditions experienced during the second half of 2008 was substantially worse for the motor industry than the first half and consequently, it is to be expected that the rate of year-on-year decline will now start easing. Nevertheless, we are grateful for the increase in sales over May and will continue to stay positive about the future outlook” concludes de Kock.

For the first time in the last 18 months the new to used ration has started to retract showing that the strength in the used vehicle market has stabilised and the new car market has started to long claw back to parity with used. Our numbers were 32,8% new compared to 30,6% in May.