S.Africa’s vehicle sales up, outlook positive

South Africa’s new vehicle sales surged by 36 percent in the year to April, the fourth consecutive annual increase, as consumer demand in the sector picks up after a more than 2-year decline.

The National Association of Automobile Manufacturers (NAAMSA) said on Tuesday total new vehicle sales jumped to 35,763 units in April from 26,288 units the previous year.

When stripping out sales from Associated Motor Holdings and Amalgamated Automobile Distributors — which report separately — sales rose by 26.6 percent to 30,462 units compared with April last year, NAAMSA said.

“The improvement should … be viewed in relation to the low sales registered this time last year due to the impact of the global financial and economic crisis at the time,” the automobile body said in a statement.

Vehicles sales recorded the first annual increase in nearly three years in January, marking a turnaround in a sector hit by depressed demand, worsened by last year’s recession, South Africa’s first in nearly 2 decades.

The auto industry is the biggest within the manufacturing sector which shed more than 200,000 of the roughly 900,000 jobs lost in South Africa’s economy last year.

Vehicle sales fell by 25.9 percent in 2009 compared with the previous year.

“The outlook for domestic sales for 2010 remained relatively positive and could gain momentum as economic activity levels improved further,” NAAMSA said.

The domestic market should receive support from further improvement in business confidence and consumer sentiment as well as lower inflation and the benefits of interest rate reductions, it added.

The Reserve Bank reduced its repo rate by 50 basis points to 6.5 percent in March, adding to 5 percentage points of cuts between December 2008 and August 2009 aimed at helping economic growth.

Sourced via af.reuters.com