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| Record '06 growth in S.Africa new vehicle sales seen |
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Record growth in South Africa's new vehicle sales is expected to carry on in 2006, although a possible interest rate hike would slow the momentum, the sector's industry body said on Monday.
Production of vehicles is the second-biggest category in the country's manufacturing sector -- which accounts for 16 percent of the economy -- and they comprise nearly 7 percent of South African goods shipped abroad.
Figures released earlier this month showed that new vehicle sales jumped to a record peak for the second month in a row in September to 54,574, a year-on-year rise of 26.5 percent.
They were fuelled by strong consumer demand driven by the lowest interest rates in more than two decades.
"The record growth trend in South African new vehicle sales is expected to continue into 2006," the National Association of Automobile Manufacturers of South Africa (Naamsa) said in a review for the third quarter.
"For 2005, the market will record, for the second successive year, record sales ... however any increase in interest rates is likely, in due course, to slow the domestic market's growth momentum."
Central bank governor Tito Mboweni warned last week that the next move in interest rates was likely to be upwards, given mounting inflation pressure triggered mainly by steep global oil prices.
Naamsa said that during the third quarter, exports of new vehicles rose by 30.7 percent versus the same quarter in 2004.
Investment approvals were set to rocket to 5.92 billion rand in 2005 from 2.2 billion rand in 2004, but this was partially due to rand strength last year -- which makes imports cheaper -- and the fact that some spending may have been deferred, it said.
Industry capacity utilisation rose to record or near record levels for all sectors in the industry, with the average well above international benchmarks.
It ranged from 83.4 percent for light commercial vehicles to 95.7 percent for heavy commercial vehicles.
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Source : http://za.today.reuters.com
(10/24/2005)
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| Other
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