Vehicle sales growth in South Africa accelerates in February, NAAMSA says

Bloomberg News - South African vehicle sales growth accelerated in February as the economy expanded and manufacturers and importers introduced special offers to attract customers, an industry group said.

Vehicle sales increased an annual 25 percent to 49,164 last month, the National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. Sales grew 19 percent in January and 30 percent in both November and December.

"The current strength in the market reflects the strong underlying momentum" in the economy, the association said. "Attractive special incentive packages offered by a number of manufacturers and importers during the month of February also contributed to the rise in sales."

The Reserve Bank has cut its benchmark interest rate to a 30-year low of 5.5 percent to help boost consumer spending in Africa's biggest economy. The recovery in vehicle sales, coupled with a rebound in export demand, has helped spur a rebound in manufacturing output, which accounts for 15 percent of the economy.

Passenger car sales gained 31 percent to 34,056 in February from a year ago, while purchases of light commercial vehicles, such as pick-up trucks and minivans, gained 11 percent to 12,854, the association said.

Export Boom

Exports surged an annual 78 percent to 25,129 in February, said the association, which expects exports to reach 300,000 vehicles this year.

"The outlook for 2011 in terms of total industry sales remained positive," the association said. "Domestically, new vehicle sales over the medium term would remain a function of the performance of the South African economy, and in the case of export sales the sustainability of the recovery in the global economy."

South Africa has seven vehicle assembly plants, run by companies including Volkswagen AG, General Motors Co. and Toyota Motor Corp., Daimler AG said on Dec. 7 it will invest an additional 2 billion rand ($282 million) at its Mercedes-Benz plant on South Africa’s southeast coast to build its latest C- Class model from 2014.