UITENHAGE-BASED Volkswagen South Africa (VWSA) has emerged as the leader in the South African passenger car market for 2002. "For the year as a whole car sales during 2002 performed remarkably well with us retailing 53 234 Volkswagen and Audi units for a full year passenger market share of 23 percent. In December our market share across both brands was 25,1 per cent with total passenger retail figures of 3 974," says VWSA sales and marketing director Jolyon Nash. Port Elizabeth-based Delta Motor Corporation sold 1 787 new passenger vehicles during December, while DaimlerChrysler in East London sold 773. DaimlerChrysler led the heavy commercial market, with sales of 196 vehicles – or 30 per cent. According to the December sales figures of the National Association of Automobile Manufacturers of South Africa (Naamsa), sales of new passenger cars slowed sharply in December. During the month 15 826 new passenger cars were sold, 19.2 per cent down on November and 9.8 per cent below December 2001 sales - bringing the full year 2002 new passenger car market to a level of 231 615 - a 3.1 per cent decrease on sales in 2001. However, this figure was ahead of most industry forecasts. Nash says that after a better than expected 2002, the outlook for new car sales in 2003 has also improved in recent months. "The recent strengthening of the rand against all major currencies has created circumstances that may result in interest rates beginning to fall earlier than expected this year. Should this occur ahead of a significant decline in rates of inflation, real interest rates, currently at a 14-year low, will remain at historically low levels thereby creating a platform of support for new car sales. Furthermore, with both inflation and interest rates expected to ease during the course of 2003, and with further tax cuts expected to be announced during the national budget presentation in February, overall levels of economic growth should also provide a supportive environment for the market during the course of the year. Recent developments in new vehicle pricing are also playing a role in creating a potentially more positive environment for new vehicle demand in 2003. During the closing months of 2002, the rate of increase in new vehicle prices slowed considerably. This, along with the recent strength of the rand, has encouraged most manufacturers to adopt a cautious approach to new car price increases in January 2003. If we have a more stable currency, lower rates of inflation, lower rates of interest, restraint in new car price increases in 2003, along with ongoing levels of reasonable growth in the economy, the new car market during the year could hold up reasonably well,” he says.