South African vehicle sales fall 27.4pc on recession, job losses
Wednesday, 5 August 2009
JOHANNESBURG, Aug. 4 (Bloomberg): South African vehicle sales declined 27.4 per cent in July from a year ago, a bigger drop than the previous month, as the economy's first recession in 17 years and rising job losses curbed consumer spending.
Sales dropped to 30,731 after declining an annual 23.7 per cent to 30,065 in June, the Pretoria-based National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. Vehicle sales have fallen every month since April 2007.
"Sales have remained disappointingly weak," the association said. "The trading environment during July remained fundamentally weak with all sectors of the South African automotive industry continuing to experience severe sustainability challenges."
Automakers such as General Motors Corp. and Volkswagen AG have scaled back production in the country and cut jobs as consumer confidence slumped and recessions in the U.S., Europe and Japan slashed export demand. South Africa's economy contracted an annualized 6.4 per cent in the first quarter, the biggest drop in almost 25 years, while employment fell by 267,000 in the same period.
Passenger car sales plunged 27.6 per cent in July from a year ago, after falling 17 per cent in June, the association said. Purchases of light commercial vehicles, such as pick-up trucks and minivans, dropped 22.5 per cent, after declining 28 per cent in June.
The Reserve Bank left its benchmark interest rate unchanged at 7.5 per cent in June, after lowering it five times since December to help spur consumer spending.
"Improvement in the automotive industry's domestic operating environment would depend on a revival in consumer spending on the back of lower interest rates as well as on stimulatory government expenditure," the association said.
Sales dropped to 30,731 after declining an annual 23.7 per cent to 30,065 in June, the Pretoria-based National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. Vehicle sales have fallen every month since April 2007.
"Sales have remained disappointingly weak," the association said. "The trading environment during July remained fundamentally weak with all sectors of the South African automotive industry continuing to experience severe sustainability challenges."
Automakers such as General Motors Corp. and Volkswagen AG have scaled back production in the country and cut jobs as consumer confidence slumped and recessions in the U.S., Europe and Japan slashed export demand. South Africa's economy contracted an annualized 6.4 per cent in the first quarter, the biggest drop in almost 25 years, while employment fell by 267,000 in the same period.
Passenger car sales plunged 27.6 per cent in July from a year ago, after falling 17 per cent in June, the association said. Purchases of light commercial vehicles, such as pick-up trucks and minivans, dropped 22.5 per cent, after declining 28 per cent in June.
The Reserve Bank left its benchmark interest rate unchanged at 7.5 per cent in June, after lowering it five times since December to help spur consumer spending.
"Improvement in the automotive industry's domestic operating environment would depend on a revival in consumer spending on the back of lower interest rates as well as on stimulatory government expenditure," the association said.