In amplification of the new vehicle sales statistics for the month of June, 2010 – released today by the National Association of Automobile Manufacturers of South Africa (NAAMSA) – the Association commented that new vehicle sales, in every segment, had generally exceeded industry expectations which had anticipated some moderation in the underlying growth momentum in the various sectors. In the event, aggregate industry sales at 39 931 units had registered an improvement of 6 849 units or 20,7% compared to the 33 082 vehicles sold during the corresponding month in 2009. The improvement should however be viewed in relation to the exceptionally depressed sales prevalent this time last year as a result of the impact of the global financial and economic crisis at the time. At the halfway mark in calendar 2010, aggregate industry sales remained 23,9% ahead of the corresponding six months in 2009. Aggregate export sales had also registered strong volume growth during June, 2010 as well as for the first six months of the year in relation to the very low base figures of the corresponding period in 2009.

Overall, out of the total NAAMSA reported industry sales of 33 946 vehicles, 89,5% or 30 369 units represented dealer / retail sales, 4,0% represented sales to the car rental industry, 3,6% represented industry corporate fleet sales and 2,9% sales to government.

Aggregate industry new car sales during June, 2010 had once again exceeded expectations and at 26 810 reflected an improvement of 5 501 units or 25,8% compared to the 21 309 new cars sold by the industry during June, 2009. The new car market had continued to perform well with the selling rate of new cars per day remaining relatively robust.

Sales of industry new light commercial vehicles, bakkies and minibuses at 11 222 units during June, 2010 reflected an improvement of 975 units or 9,5% compared to the 10 247 units of the corresponding month last year. However, the upward momentum in the new light commercial vehicle sales cycle had slowed significantly compared to previous months. Moreover, the June, 2010 light commercial vehicle sales number had registered a slight decline compared to the previous month of May, 2010.

Sales of vehicles in the medium and heavy truck segments of the industry had also recorded gains and at 735 units and 1 164 units, respectively, had recorded an increase of 242 units or 49,1%, in the case of medium commercials, and a gain of 131 units or 12,5%, in the case of heavy trucks and buses – compared to the corresponding month last year. However, medium and heavy commercial vehicle sales had also registered a slight decline compared to sales during the previous month of May, 2010.

Export sales of South African produced vehicles during June, 2010 at 20 434 vehicles registered a gain of 8 666 units or an improvement of 73,6% compared to the 11 768 vehicles exported during June last year when export sales had been particularly depressed as a result of the global financial crisis. With half of 2010 accounted for, new vehicle exports at 106 766 units had registered an improvement of 26 310 vehicles exported or 32,7% compared to the 80 456 export sales during the corresponding six months of 2009.

The 5½% decline in interest rates since end 2008, stable new vehicle prices, an improvement in loan finance approval rates – as well as pent up replacement demand – had continued to contribute to the recovery in domestic sales. However, rising uncertainty about the sustainability of the global economic recovery coupled with increased volatility in financial markets – could impact negatively on volume growth over the medium term. Additionally, other economic performance indicators, such as the Purchasing Managers Index and subdued private sector credit extension, suggested that domestic economic recovery remained patchy and fragile.

The first six months of 2010 had been characterised by relatively strong sales domestically. Over the balance of the year, however, the rate of growth in the new vehicle sales cycle was anticipated to moderate and, at this stage, aggregate domestic sales for 2010 were projected to expand by about 15% for the year, whilst export sales were projected to grow by up to 30% - provided the global economy continued in a modest recovery phase and managed to avoid a double-dip recession.