New vehicle sales in South Africa for the month of June edged up by 3.3% on last year, according to data released by South Africa's vehicle manufacturers’ association NAAMSA.

The market outlook in South Africa has deteriorated in recent months due to the impact on car prices of a weaker currency and the effects of a slowing economy.

Total industry sales were put at 53,562 units for June, a modest 3.3% ahead of last year. Export sales registered a 10.6% decline. Despite June's negative result on exports, NAAMSA said that the industry  “remained on target for new vehicle export growth of around 15%, in volume terms, for 2013”. 

NAAMSA also said that some 37,057 new cars were sold in June, a gain of 3.2% on last year.

NAAMSA said that the outlook for the automotive sector for the balance of the year looks less promising than at the beginning of 2013. As well as subdued GDP growth, above inflation new vehicle price increases will contribute to a more difficult trading environment, it said. 

NAAMSA added, however, that the lower interest rate environment should continue to lend some support to the domestic market. It also said that other positive factors include replacement demand, the highly competitive trading environment, ongoing attractive incentives and high technology new model introductions. 

Over the medium term, pre-emptive buying by consumers to avoid expected increases in prices of new motor vehicles, as a result of the weaker rand, could lend additional support, NAAMSA said. Moreover, over the next four months replacement demand by car rental companies should also contribute positively, NAAMSA added.