Dealers running out of cars

Johannesburg - Vehicle sales in South Africa are on the road to recovery, thanks to the World Cup soccer tournament.

But there is concern about falling stock levels for both new and used vehicles.

WesBank’s marketing manager George Nyabadza says motor manufacturers reduced stocks during the economic crisis, but now they are running out of stock.

He says more and more buyers are turning to new cars because the prices of used cars are rising.

Last year there was a surplus of used cars on the market, bringing their prices down. The surplus has now been absorbed and used cars are becoming dramatically more expensive.

This means that buyers are again considering new cars because the price difference between new and used cars is slight once more.

Dealers are struggling to stay ahead with supplies. What’s more, restocking could be delayed by the Transnet strike.

General Motors South Africa (GMSA) Communications head Gishma Abrahams says that although the strike has so far not had a significant effect on his company, the situation will worsen the longer the strike continues.

GMSA is very concerned about the short- and long-term effects of the strike on the company's ability to meet demand.

WesBank’s latest confidence index, which analyses vehicle sales in South Africa, shows confidence levels in the local vehicle market are at their highest since 2007.

The confidence index for the quarter to end March reached a level of 5.8 out of 10, WesBank announced on Tuesday.

The index has risen for four successive quarters. In the quarter to end-January the index was at 5.5.

The factors most affecting vehicle sales have changed since April 2009.

According to the WesBank report, in April 2009 the credit crisis was responsible for 76% of the sales problems. Today credit has an impact of only 60% on sales.

Earlier, observers predicted that a total of 441 000 new cars would be sold in South Africa this year, but the National Association of Automobile Manufacturers of South Africa recently adjusted the forecast upwards to 468 000 cars.

Nyabadza says motor manufacturers were caught on the wrong foot by the demand for their products.

This, he says, is nevertheless a good thing because the demand indicates that the vehicle market is recovering.

- Sake24.com    

For business news in Afrikaans, go to www.sake24.com.