South African new vehicle sales fell by 23.4% year-on-year in May on the back of higher interest rates, vehicle price hikes and ‘social turmoil’ in parts of the country.
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The National Association of Automobile Manufacturers (NAAMSA) said that vehicle sales reached 39,533 units in May, 23.4% below the same month last year. Car sales were down 28.1% at 22,647 units.
NAAMSA blamed a number of factors for the large fall. “These included the public holidays at the beginning of the month, new vehicle price increases over a broad range of product and the social turmoil experienced in areas of the country,” NAAMSA said in a statement.
NAAMSA added: “The South African new car market had been under severe pressure for some time now and trading conditions worsened considerably during the month of May, 2008 as the current tight monetary policy regime impacted on domestic consumer spending.”
The association also said that new vehicle sales generally were expected to remain under pressure for the remainder of the year as a result of the cumulative effect of interest rate increases, inflationary pressures, high levels of debt and the slowdown in economic activity.
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By GlobalData“The monetary authorities should also take account of the current socio-political and economic challenges facing South Africa and the resulting implications in terms of consumer and business sentiment,” NAAMSA said.
South Africa witnessed large scale social disturbances in May when immigrants were attacked in some areas. More than 70,000 people fled the violence and more than fifty people died, according to reports.
