September was a good month for car sales: Naamsa

New vehicle sales increased by 11.5 percent in September 2014, compared to September 2013, the National Association of Automobile Manufacturers of SA (Naamsa) said on Monday.

"Domestic new vehicle sales -- despite subdued economic growth and pressure on consumers' disposable income -- for the month of September 2014... reflected a substantial improvement of 6283 vehicles," it said.

There were 60,854 vehicles sold in September this year compared to the 54,571 vehicles sold in September last year.

The export sales of September 2014 were 30,778 units.

This was a "massive improvement" of 22,180 vehicles -- a 258 percent increase -- compared to the 8598 vehicles exported in September last year.

"It was for the first time in 2014 that new car sales had registered year-on-year growth," Naamsa said.

"The improvement could be attributed to a combination of factors, including attractive incentive packages, general pre-emptive buying in anticipation of further new vehicle price increases on the back of a weakening rand, relatively strong corporate purchases, replacement demand and the strong contribution by the car rental sector."

From the total reported industry sales of 60,854 vehicles, 74.5 percent represented dealer sales, 17.3 percent sales to the vehicle rental industry, 4.1 percent to industry corporate fleets and 4.1 percent to government.

The car rental industry made up 23.5 percent of all new cars sold.

Naamsa said the improvement followed a "resilience" in new vehicle sales over the past few months and reflected a "remarkable strong performance" with an above average increase in all sectors.

"Export sales had also continued to reflect underlying strength," Naamsa said.

"The latest monthly new car market had performed above expectations and at 42,918 units reflected a welcome improvement of 2997 vehicles or a gain of 7.5 percent, compared to the 39,921 new cars sold in September last year."

In September, the domestic sales of new light commercial vehicles, bakkies and minibuses were 15,179 units which reflected an improvement of 3009 units or 24.7 percent compared to the 12,170 units in 2013.

"Pre-emptive purchasing to avoid further expected price increases together with relatively strong corporate demand had contributed to the improvement," said Naamsa.

Sales of vehicles in the medium and heavy truck segments were 904 units and 1853 units respectively, which reflected a modest improvement in medium commercial vehicle sales of nine units, while heavy trucks and buses had continued to perform well -- showing an improvement of 268 units.

Naamsa said while the improvement in underlying domestic new vehicle sales and export sales was encouraging, it was advisable to retain a "cautious position" regarding the outlook for the automotive sector for the rest of the year.

"Lower economic growth, recent increases in interest rates, the possibility of a further interest rate hike before year end and above inflation new vehicle price rises -- would combine to ensure that the new vehicle sales trading environment would remain difficult.

"The domestic market was expected to register a decline, in volume terms, of between four and five percent compared to 2013," it said.