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2010 Soccer Word Cup Likely to Boost Car Sales in South Africa
Jan 20, 2010

The automotive sector of South Africa is anticipated to witness a significant growth in demand in its domestic market in 2010.

According to the National Association of Automobile Manufacturers (Naamsa), the South African automobile sector is likely to witness moderately better sales this year in the domestic market. Naamsa has also predicted higher production levels this year, as per the news published by Times LIVE.

It has been projected that in 2010, the new car market will register a growth of around 6.5%, light commercial vehicle market will grow nearly 8% and sales of medium and heavy buses and trucks is expected to be about 8% in volume terms. On a whole, domestic sales will likely reach 423,000 this year from 395,000 in 2009, up 7%.

Apart from this, automobile exports by South Africa in 2010 are likely to increase by around 56,000 Units or 32% over 2009. Major markets in the US, Japan and the European Union will be the leading export destinations.

Demand in the domestic market will be mainly driven by increasing business confidence and improved consumer sentiments. In addition to this, improving global economy also boosts the demand in the global export market.

The cumulative 5% fall in interest rates between end-2008 and August 2009 ought to perk up the financial position of households, and add to a fundamental development in sales growth in the months ahead.

Not only this, the upcoming 2010 Soccer World Cup event would also boost demand by the car rental industry. The event will support further economic revival as well. Apart from this, sales of new vehicles will also augment as a result of declining inflationary pressures.

According to a Research Analyst at RNCOS, “South Africa, in recent years, has established itself as a trustworthy producer and purveyor of automotive components and high quality vehicles worldwide. As far as international milieu and prospects for the current year are concerned, automobiles produced in South Africa will definitely witness a revival in demand. However, the country is required to mark itself as a lucrative production hub for niche automobile platform in the context of significant production over-capacity globally.”

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