New car sales fell sharply during May to a level last recorded three years ago, according to the latest National Association of Automobile Manufacturers of South Africa.

To view May's new vehicle sales figures, click here.

New vehicles sales dropped by 8,1 per cent to 27 056 units in May compared with the corresponding month last year, according to the latest figures from National Association of Automobile Manufacturers of South Africa (Naamsa).

New vehicle sales stood at 29 469 units last May. The latest figure, however, is up from the 25 377 units sold in April this year.

New car and new light commercial vehicle sales were particularly hard hit in May. Naamsa said this was due to high interest rates and the current slowdown in the South African economy.

Sales of new light commercial vehicles, bakkies and minibuses at 8 348 units during May reflected a sharp decline of 961 units or 10,3 per cent compared with the 9 309 units sales of the corresponding month last year.

Sales of medium and heavy commercial vehicles remained strong. The medium commercial segment came in a 527 units, an improvement of 19,2 per cent or 85 units, while heavy trucks and buses showed a gain of 20,6 per cent or 137 units.

Naamsa commented that sales of medium and heavy commercial vehicles and buses continued to receive support from positive investment sentiment and, particularly, replacement demand.

New vehicle exports showed a steady gain during April. Total exports came in at 10 983, up from 10 741 units in March. This included the export of 9 986 cars up from 9 813 in March and 943 in the light commercial category which is up from 9893 in March.

Naamsa commented that a number of potentially positive factors were expected to provide support to the industry during the balance of 2003. These included projected stability in new vehicle prices, lower inflation, prospects of significant reductions in interest rates and a corresponding improvement in the financial position of individuals and corporations.

The Association said it remained hopeful that sales during the second half of the year would improve sufficiently to offset the negative sales comparisons year to date.

To view May's new vehicle sales figures, click here.

Original article from Car