The passenger car market is expected to receive a boost, thanks to demand from car rental companies ahead of the Confederations Cup and the Fifa 2010 World Cup.
“Rental companies were left exposed by the Indian Premier League (IPL),” said Tony Twine, Econometrix economist, referring to the cricket tournament recently hosted by South Africa.
New vehicle sales dropped 34.7% year-on-year (y/y) to 25 819 units in May, compared to April’s 43.17% y/y fall, according to the National Association of Automobile Manufacturers of South Africa (Naamsa).
It appears that rental companies were extremely conservative ahead of the Confederations Cup and were expected to remain conservative ahead of the 2010 World Cup. The increased demand for rental vehicles during the IPL cricket tournament might however have changed a few corporate strategies amongst rental companies.
Naamsa said the next six months will be tough for the auto industry, but an uptick in domestic sales is expected towards the end of the year.
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