“The South African economy was losing momentum and risked moving into recession,” Naamsa said in a statement.
“The decline in first-quarter GDP to negative levels, the dramatic decline in the purchasing managers’ index… the sharp rise in producer inflation and the worsening trade deficit all confirmed the advent of a more difficult economic environment.”
As a result, the domestic automotive market was likely to continue facing headwinds in the short to medium term, it said.
In May 2014, aggregate new vehicles sales were 49,465 compared to the 54,490 sold in the same month last year.
Naamsa said all segments and categories recorded year-on-year declines.
Export sales declined from 26,252 in May last year to 15,613 this year, a fall of 40.5 percent.
Overall, out of the total disaggregated reported industry sales of 49,465 vehicles, 86.8 percent represented dealer sales, 5.6 percent represented sales to the vehicle rental industry, 4.9 percent to industry corporate fleets and 2.7 percent to government.
The new car market remained under pressure during May this year, with a fall of 11.3 percent compared to the same time last year.
Domestic sales of new light commercial vehicles, bakkies, and minibuses declined by 5.1 percent compared to the corresponding month last year.
Sales of vehicles in the medium and heavy truck segments reflected a mixed performance.
Medium commercial vehicle sales showed a decline of 140 units or 14.4 percent. Heavy trucks and buses registered an improvement of 74 units or a gain of 4.3 percent.
Industry new vehicle exports during May this year showed a sharp decline from 26,252 last year to 15,613 this year.
“The decline in export sales was due to the discontinuation of an export model by a major vehicle manufacturer and the temporary lack of any contribution by Mercedes-Benz,” Naamsa said.
“From the middle of 2014, the momentum of industry vehicle exports was expected to improve.”
The outlook for the automotive sector for the balance of the year looked increasingly less promising.
“At this stage, Naamsa anticipated that the domestic market in 2014 was likely to register a decline, in aggregate terms, of between 3.5 percent and five percent compared to 2013,” it said.