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That's according to the Wesbank vehicle confidence index for the second quarter of the year, released on Tuesday. The index polls car dealers across the country.
"They have probably [already] seen the best growth numbers that the industry has to offer in the foreseeable future," said Wesbank, one of South Africa's biggest vehicle loan providers. It added the expected plateau represents a "healthy and sustainable activity level".
Industry experts forecast new car sales to be 441 000 this year. However, encouraging data from the National Association of Automobile Manufacturers of SA prompted a revision of this estimate to 468 605.
Some industry players say that the one million sales a year pipe dream will remain just that, until South Africa manages to increase its tax base.
"Research shows that 8% of a country's tax base buy cars," said Manny De Canha, head of Associated Motor Holdings, which imports Asian brands such as Tata and Hyundai. "In South Africa, that works out to around 420 000 units a year."
Wesbank's quarterly index clocked in at a level of 5.8 out of 10, up from January's level of 5.5, and representing the fourth consecutive quarter of confidence growth.
The second quarter's reading of 5.8 is also the highest level of confidence since late 2007.
Banks' willingness to extend credit and consumers' impaired credit records have receded in importance to dealers' confidence levels, according to Wesbank.
The availibility of stock is a growing obstacle to confidence levels, particularly in the used car market where dealers have reported shortages in quality vehicles
Consumers still prefer second-hand models, which are perceived as "good-value". Wesbank said that 1.8 used cars are financed for each approved new car loan.
Meanwhile, stock of new car is also a point of concern at the moment, because the strike by Transnet workers - now in its second week - is delaying the movement of cars to dealerships as well as imported components to vehicle assembly plants.
- Fin24.com
