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SA car sales: 2016 ends on 'a weak note'

Johannesburg -  South African vehicle sales  ended 2016 on a weak note with figures for December 2016 at 41 639 units recording a decline of 7 519 vehicles or a fall of 15.3% compared to the same period in 2015, reports National Association of Automobile Manufacturers of South Africa (Naamsa).

The December 2016 new passenger car market and light commercial vehicle market reflected a year-on-year drop of -14.0% in the case of cars and -17.8% for light commercial vehicles. Sales of medium and heavy commercial vehicles declined by 18.2% year-on-year.

In contrast, export sales had recorded an improvement in December and at 18 668 units reflected a gain of 1222 vehicles or 7.0% compared to the 17 446 vehicles exported during December 2015. For the third year in succession, new vehicle sales during 2016 in South Africa recorded a year-on-year decline.

Why the drop in sales?

The slowdown in the domestic economy, above average new vehicle inflationary pressures, increases in interest rates, pressure on consumers’ and household disposable income and low levels of consumer confidence had contributed to a double digit decline in annual domestic sales volumes.

Aggregate sales during 2016 fell by 11.4% in volume terms to 547 442 units compared to the sales total of 617 648 in 2015.

Overall sales

Naamsa said: "Overall, 2016 turned out to be another extremely difficult year for the South African automotive industry with domestic new vehicle sales progressively under pressure, particularly at dealer level, despite attractive sales incentives and a strong contribution by the car rental sector which accounted for an estimated 16.3% of new car sales during the year.

"Industry trading conditions had remained intensely competitive characterized by pressure on dealer margins."

2016 Vehicle exports represented the highest annual Industry export figure on record and total vehicle exports at 344 822 units were up on the 333 847 vehicles exported in 2015.

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