South African motor dealers, many of them occupying very expensive new or revamped premises, are under pressure as their share of new vehicle sales continues to fall. The recent interest rate hike is the latest setback for this group of businesspeople.

Dealer passenger car sales in September were the worst since December 2004. There were only 23 000 dealer sales in the total number of 32 257 cars sold in that month. That figure was 2 per cent up on the ratio for September 2004, but 19,9 per cent below the September 2005 figure and 20,1 per cent below September 2006.

Essentially, dealer sales have dropped back to levels last seen two years' ago.

Examining the sales of Nissan dealers in September underlines the plight of this group. Nissan dealers sold only 455 cars in the month, but Nissan SA reported 1 935 sales, with the balance being rental, government and "in-house" sales

The overall dealer market has dropped from 80 per cent of reported sales to 71 per cent in the past two months. It can also be stated as the non-dealer sales being 40 per cent as large as the dealer market - 29 versus 71 per cent.

Dealer-reported passenger car sales peaked in March 2006 at 33 382 units and remained just below that level until August 2006. Then came the beginning of the upward movement of the interest rate (June 2006) and the dealers' sales performance in September 2007 was 31 per cent below that peak.

Quarterly year-on-year sales highlight the sudden downturn in the car market, following the interest rate hikes.

Jan - Mar 07 vs. 06: 87 214 vs. 90 528 (minus 3,7 per cent)
Apr - Jun 07 vs. 06: 76 016 vs. 89 940 (minus 15,5 per cent)
Jul - Sep 07 vs. 06: 74 618 vs. 90 530 (minus 17,6 per cent)