NEW car sales recorded growth for the first time in 14 months following a massive increase in sales to the vehicle rental industry.
New car sales increased last month by 4.7 percent to 36 794 units from the 35 133 cars sold in January last year.
Nico Vermeulen, the director of the National Association of Automobile Manufacturers of South Africa, said yesterday the vehicle rental industry had accounted for 31.8 percent of the new cars sold last month.
Azar Jammine, the chief economist at Econometrix, said the new car sales figures were “very good,” indicating the downturn in the market had or was about to bottom out.
However, Jammine attributed the year-on-year growth in new car sales to a combination of the extremely strong sales to the vehicle rental industry and the low sales base created by the previous 13 months.
Sales of new light commercial vehicles, bakkies and minibuses increased last month by 1.6 percent year-on-year to 11 977 units, but sales of medium commercial vehicles declined by 3 percent to 493 units and heavy trucks and buses by 1.3 percent to 1 069 units. Total new vehicle sales last month increased year-on-year by 3.7 percent to 50 333 units from 48 514 units in January last year.
Jammine said there was a downward weighting of cars for the determination of the consumer price index because people were holding on to their cars for longer, which had resulted in people proportionately spending less on cars.
He said people at the margin who had to replace their cars had waited until the new year, which had exaggerated sales last month.