New vehicle sales last month up 36.9% year on year to 46,377 units were in line with expectations, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said.

Sales were boosted by advance buying to avoid a planned CO2 new car emissions tax.

Exports were down 15.7% on July 2010 but there were "strong gains" during August compared to the very low base figure in 2009 when exports had been severely affected as a result of the impact of the global financial and economic crisis at the time.

A strike last month cost the SA industry an estimated 17,000 units, according to the Automobile Manufacturers Employers Organisation (AMEO).

Of NAAMSA reported industry sales of 40,235 vehicles, 80.3% or 32,302 units represented dealer/retail sales, 13.4% represented sales to the car rental industry, 3.3% represented sales to government and 3% industry corporate fleet sales. 

Boosted by sales pulled forward to avoid the CO2 new car emissions tax which came into effect on 1 September, and strong demand from the rental industry, new car sales rose 49.6% year on year to 33,541 units, the highest monthly market since January 2008.

Sales of industry new light commercial vehicles, 'bakkies' (pickup trucks) and minibuses rose 8.8% to 10,856 units. 

Exports were up 117.1% to 19,603 vehicles. Year to date exports were up 48.6% to 149,636 units. Export sales declined 15.7% from the 23 254 vehicles exported during July due to the strikes at assembly plants during the second half of August.

NAAMSA noted that further production disruption was currently being experienced at most vehicle manufacturing plants due to the strike in the automotive component industry.

"The effect of the ongoing strike action would undermine and compromise the industry’s already fragile track record as a reliable supplier of automotive products, vehicles and components, to international markets. Besides the loss of production, turnover and profit – prolonged industrial action could translate into employment losses," it said.

The 5½% decline in interest rates since the end of 2008, stable new vehicle prices, continuing improvements in loan finance approval rates and pent up replacement demand had continued to support the new car market.

However, ongoing uncertainty about the strength and sustainability of the global economy could impact negatively on volume growth over the medium term, particularly in the case of exports. Other domestic economic performance indicators such as the Purchasing Managers Index and private sector credit extension, suggested that domestic economic conditions going forward would remain challenging.

Over the balance of 2010, the rate of growth in new vehicle sales was anticipated to moderate with new car sales expected to decline following the introduction of the CO2 new car tax.