Car sales in South Africa declined by 13.5% in August, the market weighed down by a weak economy and higher car prices.

However, commercial vehicle sales held up relatively well according to data released by NAAMSA.

The new car market continued to experience severe pressure during August, 2016 with 30,356 units sold, a drop of 13.1% on last year. In the first eight months of the year, car sales totalled 216,251 units, a decline of some 20.8% on the same period of last year.

NAAMSA said that the August decline came in spite of a strong contribution by the car rental industry which had accounted for 21.6% of new cars sold during the month. Margins at auto industry retail/dealer level "remained under significant pressure", NAAMSA said.

Overall new vehicle sales in August were put at 46,146 units, a drop of 9.5% on last year.

There was some good news on the export front. Aggregate industry export sales at 35,620 vehicles for August – some 26.7% ahead of last year's level.

NAAMSA said the momentum of new vehicle exports is anticipated to improve further over the balance of 2016. For the year and into 2017, new vehicle exports should "contribute positively to South Africa's current account of the balance of payments reinforced by lower vehicle imports on the back of declines in the domestic market", it said.

Domestically, NAAMSA said the short- to medium-term outlook is one of low economic growth and further pressure on consumers' disposable income. Double digit new vehicle price increases, as a result of exchange rate weakness and vehicle production inflation of 14.8% for the first seven months of 2016, relatively high interest rates, low levels of consumer and business confidence – will "combine to further pressurise sales of new motor vehicles, particularly new cars".

The lower levels of new vehicle sales represented a reflection of current difficult economic conditions in South Africa, NAAMSA noted.