South African new vehicle sales declined by 30.1% to 38,143 units in October compared to the same month last year, the National Association of Automobile Manufacturers (NAAMSA) has said.

Aggregate NAAMSA sales for the first ten months of 2008 were 19% lower than the sales recorded during the corresponding ten months in 2007.

NAAMSA said October new car sales reached 23,077 units - a decline of 33.3% on last year.

NAAMSA said in a statement higher than average price increases and deteriorating consumer confidence due to a global financial crisis weighed on a market already under pressure from higher interest rates.

Inflationary pressures were likely to abate during 2009, NAAMSA said,  with interest rates following suit. The second half of 2009 was likely to see an improvement in the financial position of consumers and stronger economic activity levels giving rise to optimism of a recovery in demand of new motor vehicles from about the middle of next year.

The main source of encouragement during October revolved around the industry's new vehicle exports which maintained strong upward momentum. Some 28,041 new vehicles had been exported, 62.8% ahead of last year.

Vehicle exports for 2008 as a whole were projected by NAAMSA to reach over 280 000 units.