New-vehicle sales in the domestic market declined by 8.9% to 45 888 units in the first month of the year, compared with January last year.
Sales numbers released by the Department of Trade and Industry show that January new passenger car sales dropped by 11.6 % to 32 642 units.
Sales of new bakkies, minibuses and vans, at 11 689 units, contracted by 2.1%.
Sales of medium trucks, at 443 units, dropped by 6.1%.
Sales of new heavy trucks and buses delivered some good news, however, increasing by 4.5% to 1 114 units.
New-vehicle exports from South Africa also moved upwards in January, growing by 22% to 14 212 units.
Despite the poor January figures, the National Association of Automobile Manufacturers of South Africa (Naamsa) says that it remains upbeat about the prospects for the remainder of the year.
The association says that continued improvement in the Reserve Bank’s leading indicator, as well as the substantial increase in the latest Purchasing Managers Index, hinted at enhanced economic conditions over the medium term.
“The [recent] considerable appreciation in the value of the rand will reduce inflationary pressures and serve to enhance consumers’ disposable income.
“Combined with the recent positive political developments and improved business confidence, it is possible for economic growth in 2018 to surpass current expectations.”
However, warns Naamsa, much will depend on the February 2018 Budget and government’s commitment to fiscal discipline.
“On the assumption that South Africa will avoid a further downgrade during the first quarter of 2018, Naamsa anticipates that economic growth could recover to a level above 1.5% in 2018.
“This will benefit new-vehicle sales in particular, which could then expand to levels above the 2% to 4% growth projected at the beginning of the year.
“New-vehicle price inflation – currently at an annualised rate of around 2.5% – together with continued replacement demand, will serve to support new-vehicle sales in the months ahead.”
Naamsa expects 2018 new-vehicle exports from South Africa to show “fairly strong upward momentum on the back of improved growth in the global economy”.
An increase in export sales of about 11%, to 366 050 units, is anticipated for the year.