Dropping Off new vehicle sales

How can one forget those massive strikes in the automobile sector back in September and October. Causing the loss of millions of rands it had badly affected the economy of South Africa. The vehicle sales seemed highly deceiving last month. High rate of supply shortage was seen due to the strikes in the automobile as well as the transport sector.

Looking at the sales figure presented by NAAMSA on Monday, 50,806 new vehicles were on road in November. However economists were expecting a drop of 2% but it resulted in hard times as a drop down of 4.6% was seen as compared to the same month in 2012. A 9% total sales growth was seen in the year 2012 but unfortunately it will not be repeated this time.

Month by month the vehicle sales were seen to be declining with October sales dropping off at 10.76%.

Not only the strikes affected the automobile sector but even the gross domestic product was also at a very weak level of only 0.7% in the third quarter this year.

Rudolf Mahoney - the head of research at Wesbank said that “No doubt the stock supply issues were the main reason behind the declination in the market but further inflamed strikes in the transport sector and the workers union had worsen the situation as the manufacturers had already restarted their production lines.”

Further added he said that “Though less but we can expect a growth of 2.5% at max which is better than the economic growth of 1.9%.”

Sibusiso Gumbi - the research analyst at the Standard Bank said that “Keeping in mind the increasing vehicle prices there are few hopes for a slight credit in the vehicles sales this month as the festive season is near.”