South African domestic car sales jumped by 23% in March, exports hit high

Bloomberg News - South African domestic vehicle sales rose an annual 23 percent in March while exports reached a monthly record, an industry group said.

Sales in the country increased to 53,478, the National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. The average growth rate in the previous four months was 26 percent.

Carmakers have benefited from interest rate cuts that have brought the benchmark to a 30-year low of 5.5 percent, as the Reserve Bank sought to boost consumer spending in Africa’s biggest economy. Higher sales in the past 15 months "reflected a robust recovery on the consumption side of the South African economy driven by the six and a half percent decline in interest rates since December 2008," the association said. 

Passenger car sales gained 24 percent from a year ago to 35,167 in March, while purchases of light commercial vehicles, such as pick-up trucks and minivans increase 22 percent to 15,736, the association said.

"We had a very good month," Johan Kleynhans, marketing and sales director for Nissan Motor Co. in South Africa, said in an e-mailed statement today. "With our passenger cars performing particularly strongly, we find ourselves back on track after a slow start to the year and an improved February."

Exports surged an annual 37 percent to 29,254 in March. The association forecasts exports will reach 300,000 this year.

Economists predict an interest rate increase in the second half of the year as rising oil and food prices may push up inflation above the 3 percent to 6 percent band targeted by the central bank, from the current 3.7 percent.

A rate increase would temper future sales growth, which will be supported by global economic growth of about 4.5 percent this year, the association said.

Japan’s earthquake and tsunami may have added to pre- emptive buying last month, resulting in component and vehicle stock shortages and causing a "temporary impact on domestic sales and exports," the carmakers said.