South African vehicle-sales growth accelerated in July, as the lowest interest rates in more than three decades spurred consumer spending and vehicle rental companies replenished their fleets, an industry group said.
Sales rose 18.3 percent from a year earlier to 54,067, the Pretoria-based National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. Sales growth increased from 15.6 percent in June. The median estimate of three economists surveyed by Bloomberg was 14.2 percent.
Vehicle-sales growth has quickened even as a debt crisis in Europe, which buys about a third of South African manufactured exports, curbs growth in Africa’s largest economy. The economy should expand 2.7 percent this year, down from 3.1 percent in 2011, according to the government and central bank.
“Despite prospects of further slowing in the domestic economy, the automotive sector continued to perform remarkably well,” with domestic sales estimated to increase by 10 percent for the full year, the association said. Sales are being supported by “historically low interest rates, further improvement in vehicle affordability in real terms and improving demand for credit by households and businesses.”
The central bank cut its benchmark interest rate by half a percentage point to 5 percent on July 19 to help support the economy and boost consumer spending. Borrowing by households and businesses rose 8.7 percent in June, up from 8.3 percent a month earlier, the Pretoria-based bank said on July 30.
Passenger-car sales increased 18 percent in July from a year earlier to 37,844, with rental companies accounting for 16.5 percent of sales. Purchases of light commercial vehicles, such as pick-up trucks and minivans, rose 21 percent to 13,781, Naamsa said. Sales of heavy trucks and buses rose 9 percent to 1,619 units.
Vehicle exports rose 12 percent to 27,625 last month, the association said.
“The momentum of industry-export sales should improve further over the balance of the year as various vehicle-export programs were ramped up, particularly exports of light commercial vehicles,” it said.
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