The predicted slowdown in vehicle sales in South Africa is happening earlier and at a higher rate than originally expected.

Aggregate sales of 458 844 units reported to the National Association of Automobile Manufacturers of SA (Naamsa) for the first nine months of 2007 was 3,2 per cent below the figure for the corresponding nine-month period in 2006. (When the non-reporters are included the total sales are 518 901 units and sales are 2,9 per cent down).

Rental sales and deliveries of vehicles to government and "in-house" sales by the companies themselves have boosted sales in recent months, because dealer sales have slumped. Dealer passenger car sales in September were the worst since December 2004, with only 23 000 of the reported 32 257 car sales reported to Naamsa for the month going through dealers.

September was a real disaster, with a massive 12,9 per cent decline in the overall market compared with the same month a year ago. It was also during September that the industry heard that they would only hear the "basic architecture" of the new motor industry support programme - with no specific details - only at the end of the year; this after it had been widely expected that details of the future programme would have been announced as long ago as Auto Africa, which was held in October 2006.

However, as if this was not enough, the Governor of the Reserve Bank, Tito Mboweni gave the industry another solid punch to the solar plexus with a controversial 50 basis point increase to the interest rate, hiking it to 14 per cent as we entered the last quarter of 2007. The latest hike - the seventh in succession - equates to a 3,5 per cent rise in the interest rate since June last year and has been widely criticised as "one hike too far".

The third quarter of 2007 was tougher than expected for the motor industry as it was compounded by a week-long strike in the vehicle components and related industries - including at the already overstretched truck body builders.

The joint bargaining forum of the vehicle manufacturing industry itself staved off a strike at the last minute, but had to agree to a 9 per cent wage increase. Although vehicle manufacturers were spared from strike action, their component supplies dried up as the support industry was affected by industrial action. The negotiators in the latter dispute were forced to offer between 8-10 per cent in wage rises (similar to the manufacturers) to get factories back in production.

The wage increases are way above the inflation rate and have put extra cost pressure on the local manufacturers. Commentators have said the upshot could be the importation of more vehicles and components, as well as increased automation and consequent labour cuts as a means of lowering unit costs. Therefore, in the end, the strike could be counter-productive to the workers at both vehicle and component manufacturers.

The effect of the strike had a bigger impact on the availability of commercial vehicles than passenger vehicles, because already 55 per cent of those models are imported and general stock levels of cars was fairly high as sales were not matching forecasts.

The National Credit Act (NCA) continues to be a factor contributing to the slowdown in sales, with the medium commercial vehicle market evidently suffering most as many purchasers of that size truck or van are individual businesspersons or small businesses with credit limitations.

Toyota SA remained the stellar performer in the local market by selling 113 809 units in the first nine months of the year - 3,2 per cent up on its figure for the same period last year. That equated to a share of 21,9 per cent of the total market, including non-reporters, and the 27-year market leader overcame difficult trading conditions in August to set a new industry record by selling 14 330 vehicles in that month. That performance bettered the previous high point, set by Toyota in March this year, by 195 units. Toyota also exported 5 258 units in August, for an aggregate total for the month of a massive 19 588 units.

Volkswagen, by contrast, went into reverse gear in terms of its total vehicle sales in the first nine months of 2007, even though they remained in a comfortable second place behind Toyota. VW sales for the period slumped by 4,2 per cent to 78 857 units. General Motors retained third position, but also sold fewer vehicles in the period, as did fourth-placed Ford, while DaimlerChrysler improved every so slightly, by less than 500 units.

BMW remained in seventh spot, but was a big loser, with sales for the period under review down by almost 20 per cent compared with the first three quarters of 2006. Honda showed strong growth to jump into eighth, displacing Tata, with Renault sliding from ninth to 10th on the back of a drop of 45 per cent in sales as the brand battles to improve its image of reliability and after sales service.

Interestingly, the non-reporting brands from the Associated Motor Holdings' stable appear to have lost momentum and sales virtually stagnated - 50 057 for the first nine months of 2007 vs. 50 016 for the same period a year previously.

Total new passenger car sales reported to Naamsa on a year-to-date basis were 8,7 per cent down at the end of September. (The figure is 7,9 per cent when the non-reporters are included).

VW/Audi/SEAT increased its dominance of the car market to 25,5 per cent (up from 24,4 per cent), while closest rivals Toyota/Lexus shed 0,6 per cent, going down to 22,7 per cent as the high volume Corolla and RunX were run out and the Auris and new Corolla launched.

DaimlerChrysler, boosted by huge sales of its new C-Class at introduction, overtook Ford for third place, while GMSA stayed in fifth, followed by BMW in sixth. Nissan outsold stablemate Renault for seventh. Honda jumped from ninth to eighth in the car market too, with Renault in ninth and Tata remaining at 10th.

There was a fair amount of confusion when the passenger car sales figures were released at the end of September. The norm is that vehicle models based on the same platform can be bundled together i.e. Golf/Jetta. Polo/Polo Classic, Yaris hatch/sedan.

However, Toyota grouped both old and new Corolla as well as Auris, RunX and Verso under one total and this grouping was then said to be the best seller for the month, with 3 242 sales, compared with 3 123 for Polo hatch and Classic. Splitting out the Toyota figures we have new Corolla on 1 898, Auris on 602, old Corolla on 416, Verso on 287 and RunX on 39.

In a "purified" list of model ranges (according to body type) we see that it looks like a two-horse race for the titles of most popular car and runner-up at the end of the year between the VW Polo hatch (21 615 sales YTD at the end of September) and the long-in-the-tooth VW CitiGolf (20 506 sales at the end of September). The only other model in shouting distance is the Corolla on 17 558 sales in the first nine month of 2007, with the Yaris T3 hatch in fourth position.

The next three positions are very close between the Mercedes C-Class (10 745), BMW 3-Series (10 633) and Opel Corsa (10 586). The others making up the top 10 are the VW Polo Classic (7 617), Ford Fiesta (7 033) and the VW Golf 5 (6 377).

Toyota leads the way in the SUV market with Fortuner (5 887) and in the MPV market with Avanza (7 276) and Corolla Verso (2 331).

In a climate of difficult trading conditions this year, it is interesting to note the high volume of premium ultra luxury and sports car brands that have been sold in South Africa in the first nine months of this year. Porsche, at 588 units compared with 334 for the same period last year, is the leader here, while an amazing 42 Ferraris (compared with three), 22 Lamborghinis (compared with four), and 22 Maseratis (compared with none) have been retailed in this period. (There are no figures available for Aston Martin, Rolls Royce and Bentley).

The picture continues to be much brighter in the commercial vehicle segments, with the only decline being 0,7 per cent in large bus sales. Light commercial sales were up 7,2 per cent, mediums rose by 5,2 per cent and the heavy and extra-heavy truck sectors grew by an impressive 12,8 and 20,7 per cent.

Toyota, with much improved supply of Hiluxes and Quantums, made a big jump to a dominant 29,3 per cent share of the LCV market in the first in the first nine months of the year, with market share up 6,3 per cent. GMSA remained in second place despite losing 2,7 per cent in share, while Ford held onto third, but again with a smaller share - 1 per cent down. Nissan's volume remained almost static - it lost 1,2 per cent, but stayed in fourth spot, ahead if DaimlerChrysler (down 1,7 per cent).

VW remained on a 2,2 per cent share, but jumped from ninth to sixth with a wider LCV range, getting ahead of Tata (down 1 per cent) and Fiat (down 0,6 per cent). The high profile Chinese brand, Chana moved solidly into the top 10 among LCV sellers, filing ninth position with a 1,5 per cent market penetration, while Mahindra made up the last of the top 10 sellers.

Hilux has outdistanced its challengers among individual model ranges, with its share of the total LCV market up 5,4 to 18,2 per cent on the back of sales of 26 791 units. The Opel Corsa Utility was second among model ranges, with the Ford Bantam third and the Isuzu KB fourth (down from third a year previously). Nissan's long-running Hardbody was fifth. Ford's Ranger remained in sixth, ahead of the soon-to-be-discontinued Toyota Hi-Ace bus in seventh. Nissan's B140 half-ton pick-up is another evergreen that continues to hold a spot in the top 10 despite its time on the market nearing an end.

Sales of Toyota's Quantum bus and van have almost doubled; due mainly to its popularity in the minibus taxi market and it was in ninth place among LCVs, ahead of the Mitsubishi Colt. It seems acceptance of the new Mitsubishi Triton is very low, although it must be admitted the range is fairly limited, with only double cabs on the market at this stage. (Locally built Triton single cabs will replace the Colts in the middle of 2008, which should give the brand a much-needed boost).

Mercedes Benz continues as the overall leader in the SA truck market - mediums, heavies and extra-heavies - with 4 154 units sold between January and September. Three manufacturers are closely grouped behind the long time market leader, being Toyota (3 893), Nissan Diesel (3 600) and Tata (3 271), with Isuzu in fifth, MAN sixth, Mitsubishi Fuso seventh and Iveco eighth.

The Toyota Dyna is still the most popular medium truck, despite losing 1,5 per cent in market share in the first three quarters of 2007, compared with the same period last year. Tata is an even bigger loser - down 2,3 per cent - but held onto second spot, while Mercedes-Benz, boosted by major sales of its Sprinter buses and vans, increased its share by a whopping 3,3 per cent to overtake the Nissan Cabstar for third place.

Toyota Trucks' Hino 500 Series continues to lead the way in the heavy truck segment (8 501 - 16 500kg) and increased its penetration by 2,2 to 24,5 per cent, but Nissan Diesel followed closely with 21,2 per cent and Tata was in third position on 16,9 per cent.

The extra-heavy truck market (over 16 500kg) continued to be the preserve of Mercedes-Benz, with 1 882 unit sales and a 19,1 per cent share, ahead of its arch-rival MAN (1 274 sales and a 13,1 per cent share, which was a drop of 3,6 per cent over the situation a year earlier). Nissan Diesel has become an increasingly important player in this market, having boosted its unit ales by 46 per cent to 1 135 units and market share by 2 per cent. There was, however, a big drop in volume to Tata in fourth place with 569 sales.

VW, which entered the SA truck market with its Brazilian-sourced Constellation range, sold 28 trucks (11 heavies and 17 extra-heavies) by September's end.

In contrast to the growing truck sales, the market for buses over 8 500kg shrunk by six units (0,7 per cent) in the period under review, going down from 856 to 850 units, with MAN the dominant player with 357 sales for a 42 per cent share. Mercedes-Benz (213) and Scania (189) were the other major players in that market.

Naamsa commented that the industry's performance in the final quarter of 2007 would depend on the momentum of the SA economy, the direct ion of interest rates and new vehicle price trends. New car sales would benefit from "fleeting up" by the rental companies as they prepare for the holiday season, while commercial vehicle sales were expected to grow on the back of ongoing infrastructural development spending and construction activity.