Higher interest rates and other unfavourable market conditions are expected to keep pressure on South Africa’s vehicle manufacturing industry for the next year, an industry body was quoted as saying on Tuesday.
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The National Association of Automobile Manufacturers of South Africa (NAAMSA) said in a third quarter review it had revised downwards industry sales and production, Reuters reported.
“Trading conditions in the new car market have deteriorated substantially in recent months as a result of the 3.5% increase in interest rates over the past 15 months,” NAAMSA said in a statement cited by the news agency.
The report said passenger car sales have been particularly hard hit by the rate increases – total new vehicle sales have declined for six months in succession, pointing to lower sales for the year.
NAAMSA reportedly said the higher rates, a new, tighter credit law from June, vehicle registration problems earlier in the year and rising household debt had all combined to slow new car sales.
In contrast, demand for new commercial vehicles held up well in the third quarter due to huge infrastructural spending and strong investment, it said, according to Reuters.
According to the news agency, NAAMSA said third quarter sales of passenger cars fell by 10.7% to 102,145 units, compared to 114,344 units in the same period last year, while combined commercial vehicle sales fell 1.4% to 58,677 units.
