South African vehicle sales growth slows in November on weakening economy

Bloomberg News (Johannesburg) - South African vehicle sales growth slowed in November and exports plunged as the debt crisis in Europe threatened to stall the continent’s largest economy.

Sales climbed 12 percent to 49,499 vehicles from 44,318 in the same month a year ago, the National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. Vehicle sales expanded 19 percent in October and 30 percent in September.

"The slowdown in the rate of growth in the new vehicle sales cycle was consistent with the slower economic growth recorded in the general economy," it said. "Prospects of slower global growth, particularly in developed economies, could impact on industry export sales going forward." 

The economy expanded less than economists estimated in the third quarter, as government officials slashed forecasts for growth on increasing concern the European debt crisis may push the global economy toward another recession.

Finance Minister Pravin Gordhan cut the growth forecast for 2011 to 3.1 percent on Oct. 25 from a previous estimate of 3.4 percent. Gross domestic product expanded 1.4 percent in the third quarter, little changed from the 1.3 percent annualized rate in the three months before, the slowest pace in about two years.

The debt crisis in Europe, which purchases about 30 percent of the nation’s manufactured goods, may push the regional economy into a "mild recession," said European Central Bank President Mario Draghi. 

Exports Slashed

The Reserve Bank's decision to keep the repurchase rate at a 30-year low of 5.5 percent all year has helped support vehicle sales, the association said. 

Passenger-car sales jumped 12 percent to 33,074 in November, while purchases of light commercial vehicles, such as pick-up trucks and minivans, also gained 12 percent to 14,125, Naamsa said.

Exports declined 28 percent to 20,480 vehicles in November from a year earlier, it said. The association last month reduced its estimate for shipments this year to 280,000 from a previous forecast of 300,000.