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South Africa Vehicle Sales Increase at Slowest Pace in 2.5 Years

Oct. 2 (Bloomberg) -- South African vehicle sales increased at their slowest pace in 2 1/2 years in September as mine and transportation strikes damped consumer and business confidence in the continent’s biggest economy, an industry group said.

Sales rose 1.4 percent from a year earlier to 55,097, the Pretoria-based National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. Sales growth decelerated from 9.4 percent in August.

“The current high level of industrial action in an increasing number of sectors in the economy dented business confidence in South Africa,” the association said. “Consumers similarly would have been affected and concerns about the macro socio-economic environment in the country was likely to have resulted in a deferral of purchasing decisions.”

The central bank on Sept. 20 cut its forecast for economic growth this year to 2.6 percent from 2.7 percent. The FNB/BER consumer confidence index remained close to a four-year low of minus 1 in the third quarter, First National Bank said on Sept. 18.

Wage strikes have halted operations at Anglo American Platinum Ltd., Lonmin Plc, AngloGold Ashanti Ltd., and Gold Fields Ltd. in the past month. Sixty thousand transportation workers, mainly truck drivers, have also walked off the job, demanding improved salaries.

The central bank last month kept its benchmark interest rate at a 30-year low of 5 percent to help support the economy and boost consumer spending.

Gasoline Rises

Domestic gasoline prices will increase tomorrow by 1.9 percent from a month earlier, according to the government’s Central Energy Fund.

Passenger-car sales rose 4.4 percent in September from a year earlier to 39,496, with rental companies accounting for 18.6 percent of sales. Purchases of light commercial vehicles, such as pick-up trucks and minivans, fell 5.2 percent, the automobile association said. Sales of heavy trucks and buses dropped 7.7 percent.

Vehicle exports rose 2.7 percent to 25,935 last month, the association said. Domestic sales will probably increase 10 percent this year, it said.

“Looking ahead to 2013, increasing inflationary pressures on the back of expected higher fuel and food prices and the impact of rand weakness on new vehicle pricing were likely to result in a more difficult trading environment and more subdued growth in vehicle sales,” the association said.

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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