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August vehicle sales underwhelm at a time of major focus on local industry

 

Brandon Cohen, National Chairperson of the National Automobile Dealers Association (NADA)

August vehicle sales in South Africa showed a 4.9% decrease compared to the same month last year, a drop that comes at a critical time for the automotive sector. "This decline is disappointing, especially considering the July sales results and improving consumer sentiment in the country” said Brandon Cohen, National Chairperson of the National Automobile Dealers Association (NADA).

Despite the overall downturn, Cohen pointed out that some segments performed well. "There were positive trends in the market, with passenger car sales up 3.1% and medium truck sales rising by 8.1% compared to August 2023," he noted. However, he also acknowledged that the light commercial vehicle segment took the biggest hit, declining by 21.5%, which reflects a possible lack of confidence in the business sector of the economy. Heavy truck and bus sales were also 11.4% lower than in the same month last year for similar reasons.

Rental companies remained active buyers, contributing 12.4% of total sales and 16.7% of car sales, while retail dealer channels accounted for 81.5% of total sales. However, Cohen described the export performance as "very disappointing," with built-up vehicle exports from South Africa down more than 30% for the second consecutive month.

Looking ahead, Cohen expressed optimism about the potential for an interest rate cut to stimulate the market. "A reduction in interest rates could significantly benefit the South African retail motor industry and the broader economy," he said. With inflation falling to 4.6% in August and further improvements anticipated, he believes that "a rate cut seems imminent when the Reserve Bank’s Monetary Policy Committee meets later this month. We could take direction from the Federal Reserve in the United States, where the chairman has indicated that a rate cut is likely."

Cohen noted that while interest rate changes typically take three to six months to impact consumer purchasing patterns, the current pent-up demand may lead to a quicker response in the local market.

He also commented on the introduction of the new two-pot retirement system, which began yesterday, saying, "It will be interesting to see how many people take advantage of the opportunity to access their savings within the prescribed limits. If the numbers are close to predictions, this could inject anywhere between R10 billion and more than R100 billion into the economy."

He acknowledged that while this could have a significant short-term impact by increasing spending or debt repayment, it could also have longer-term consequences. “The two-pot system withdrawals might offer a temporary boost to the economy but could be detrimental in terms of long-term worker security,” Cohen explained.

Cohen also praised the Government of National Unity (GNU) making strides in critical areas affecting the automotive industry. The Rand has also shown strength recently, holding below R18/$1, which benefits consumers in terms of inflation and sentiment.

Finally, Cohen welcomed the nearly one Rand per litre reduction in the September fuel price, which he said would help reduce inflationary pressures in other areas. "With the Brent crude price stabilising around $77 a barrel, sustained decreases in fuel prices will positively impact consumers' wallets," he concluded.

NADA is a proud association of the Retail Motor Industry Organisation (RMI).

 

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Brabham’s title secured at Monza

By Graham Duxbury @TheRealDux 

 

Although he did not finish the Italian Grand Prix, held at Monza on this day in 1966, Jack Brabham nevertheless had amassed enough points to secure his third World Drivers’ Championship title. 

This was a unique achievement, as he became the only world champion to win the title in a car – the Brabham Repco - bearing his own name.

The race was won by Ludovico Scarfiotti who thrilled the ‘tifosi’ by winning for Ferrari. His teammate, Mike Parkes, who had qualified in pole position, finished second. Denny Hulme in the second Brabham Repco completed the podium.

Brabham, who had fought for the lead in the early stages of the race, retired on lap seven due to an engine oil leak.

The race’s most dramatic moment was on lap 17 when Richie Ginther’s Honda suffered a tyre failure at Curva Grande, crashing into the trees. Fortunately, Ginther was unharmed, though his car was destroyed.

This was to be Scarfiotti’s only GP triumph, but it was auspicious, as he remains the only Italian to win for Ferrari at Monza since Alberto Ascari in 1952.

Photocredit: Getty Images

 

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