Naamsa reported on Wednesday that all sectors of the new vehicle market recorded double-digit gains in May compared with the same period last year. Click here to access the sales figures.

:: Click here for May's complete new vehicle sales figures ::

Naamsa reported on Wednesday that all sectors of the new vehicle market recorded double-digit gains in May compared with the same period last year. Aggregate new vehicle sales in May (34 345 units) were 7 292 (26,9 per cent) more than the 27 053 vehicles sold during the corresponding month last year.

A spokesman for the association said that positive economic fundamentals - with GDP growth and retail sales upbeat, intense competition, attractive incentives and new product offerings -continued to provide support for the new car market in May.

New car sales (22 301 units) were 4 921 vehicles (28,3 per cent) more than the 17 380 sold during May last year. Last month’s new car sales were also 3 567 (19 per cent) more than the 18 734 sold during April, “during which demand was subdued as a result of the Easter Holidays, the General Election and the Ten Years of Democracy Celebrations,” Naamsa said.

The association also noted that the investigation by the Competition Commission into manufacturers’ pricing policies had “created a degree of uncertainty amongst consumers and had resulted, in a number of instances, in consumers delaying purchases pending the outcome of the probe”.

“Based on reports by manufacturers, consumer perceptions and decisions to hold back on purchases had negatively affected the new car market during May,” the spokesman added.

Naamsa urged the Competition Commission to expedite and bring the investigation into pricing related matters to an early conclusion, specifically to remove uncertainty in the market place.

Sales of new LCVs, bakkies and minibuses maintained strong market growth momentum in May and at 10 421 units, registered an improvement of 2 073 vehicles (24,8 per cent) compared with the 8 348 sales of the corresponding month last year. New light commercial vehicle sales in May were also 1 908 units (22,4 per cent) more compared with the 8 513 vehicles sold in April.

Retail activity in the medium and heavy truck segments of the industry during May had maintained strong upward momentum and at 611 units and 1 012 units, respectively, registered an improvement of 62 units (11,3 per cent), in the case of medium commercials, and 214 (26,8 per cent), in the case of heavy commercial vehicles and buses – compared with May 2003.

Naamsa said the industry’s performance during the first five months of the year established a solid base for strong year sales totals, but that “during the rest of 2004, monthly comparisons would be relative to the higher corresponding monthly sales totals recorded from June 2003 onwards”.

“The higher economic growth rate, strong business sentiment and enhanced new vehicle affordability support expectations of above average growth in new vehicle sales for 2004. The industry remains on track for one of its best years since the mid Eighties.”

:: Click here for May's complete new vehicle sales figures ::

Reaction from manufacturers:

McCarthy Motor Holdings chairman Brand Pretorius said fleet sales too showed an increase as "companies are replacing aging fleets in order to protect productivity levels."

Pretorius said May vehicle sales benefited from a full 23 working days, as well as the carry-over business from April.

"Last month (April) was severely disrupted because of all the public holidays. Following the closure of some factories over the Easter break, stock was short initially but improved significantly from middle May," Pretorius added.

Pretorius maintained that prospects for the industry look good. "On a year-to-date basis, the total market is up 18 per cent, reconfirming the view that the industry is heading for its highest sales total since 1984.

"Market conditions remain favourable and June is therefore expected to be another excellent month for vehicle sales," he concluded.

Ford Motor Company of SA's director of marketing and sales Nigel Harris said: "The demand for our new Ford Fiesta, Bantam and Ranger models is at levels we haven't experienced for some time. We believe that new vehicle sales figures could have been even higher if our experience of short supply on certain key models was felt by other motor manufacturers and distributors as well.

"Both private and business buyers are active in the market place," GMSA sales and marketing director Malcolm Gauld said. "The easing of interest rates continues to filter through into the market place as debt is cleared and vehicle finance is more affordable."

According to , motor industry analyst and Econometrix director Tony Twine said: “Although last month's vehicle sales figures were strong the trend line was beginning to move sideways rather than upwards”.

Toyota president and chief executive Johan van Zyl said the most significant trend was the turnaround in the light commercial market from March this year onwards: "The agricultural sector is back in the market, with the prospect of a better year for farmers than was initially projected. Add to this, support from commercial buyers moving ahead with fleet replacement programmes and we have a situation where the growth in this sector appears to be sustainable."

VWSA’s general manager of communications Bill Stephens said: “sales of the Touran, Golf IV, Jetta IV, Polo and Polo Classic were impressive last month. In the Audi stable, the A3 and A4 also recorded significant sales”

Stephens added that given the usual differentials in seasonal demand between April and May, the May market could have been expected to yield new car sales around 12.5 per cent above sales in April. “The 19 per cent monthly growth in the market is therefore significant,” he added.

“Ongoing new model introductions continue to stimulate interest and demand, and trading circumstances remain extremely aggressive,” Stephens added, but warned that some indications were emerging that the market could be starting to consolidate at what is a high level.

Original article from Car