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The SA Daily 01 August 2018

Vehicle sales go slowly

  • July vehicle sales will be published today. In Q2:18, total new vehicle sales declined by 5.4% y/y, from a decline of 3.4% y/y in Q1:18, due mainly to a sharp decline in exports (-17.3%) and government sales (-12.1%), in line with the tightening fiscal policy measures per the February 2018 Budget.
  • Exports were slower due to delays as the BMW Rosslyn plant switched from3 Series production to X3 production. In Q2:18, BMW’s export volumes almost halved, to 6,275 units, from 12,205 in Q2:17 (a 48.6% y/y decline).
  • However, X3 exports have gained some speed but are still nowhere near historical levels. Exports should gain from X3 export momentum as well as from the softer rand.
  • We see vehicle sales growth rising modestly in 2018. However, it is yet to be seen if the SA auto industry will be affected by US tariffs. Any escalation in the global trade war is an abiding key downside risk for the sector. See our report Q2:18 passenger vehicle sales of 25 July, by Siphamandla Mkhwanazi.

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