Reports Vehicle Market Starts Bottoming Out, Rental Companies Gear Up For 2010

By: Tian Li

New vehicle sales in October provided evidence that the market was in the process of bottoming out, noted McCarthy CE Brand Pretorius, but he added that the motor industry was not out of the woods yet.
According to figures released by the National Association of Automobile Manufacturers of South Africa and Associated Motor Holdings, sales last month showed a 0,5% improvement over sales recorded in September.
On a month-on-month comparison, total vehicle sales of 36 082 units showed a 12,5% decline compared with sales in October 2008, which was a much smaller margin than the around 25% losses recorded up till now.
However, such comparisons were bound to become more favourable going forward, as October last year was when the global recession hit the local market squarely on the jaw.
While the passenger car market dropped only 3,7% compared with October last year, sales of commercial vehicles remained depressed. The light commercial vehicle segment recorded a 24,4% decline in sales when compared with October last year, totalling 9 908 units.
Sales in the medium commercial vehicle segment dropped by 22,7%, to 627 units, and heavy commercial vehicles by a substantial 46,4%, to 955 units. The 24 592 passenger vehicles sold last month were again underpinned by purchases from car rental companies, said Pretorius.
Ford Motor Company of Southern Africa sales and marketing vice-president Jacques Brent said on Tuesday that 5 100 vehicles entered the rental market in October, which was a 28,9% improvement over October last year as rental companies gear up for the 2010 FIFA World Cup.He added that rental companies were expected to bulk up its fleet during January to April next year, and not from June onwards, as was normally the case.
However, he believed that this might create a problem in the used-car market pricewise during the second quarter of 2010, should a significant amount of vehicles flow to these showroom floors from rental companies. On a year-to-date basis the total market was now down by 28,8%. Brent expected the market to show 7% growth next year.

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