Wesbank bullish on 2011 vehicle sales
Johannesburg - Vehicle sales are likely to increase by 15.2% to 567 850 units in 2011, Wesbank said on Monday.
"If one plots vehicle sales against interest rate movements over many years, we have a minimum of seven growth quarters ahead of us," said Wesbank chief executive Brian Riley.
The group was particularly optimistic over the continued improvement in passenger vehicle sales for the year.
"The buy-down will continue with the higher LSM (living standards measure) segments leading the way. We suggest that passenger vehicle sales will be up 15% on the back of a strong rand, plenty of new models and a shortage of late model used cars."
Sales in light commercial vehicles were also expected to strengthen. Medium, heavy and extra heavy vehicles would continue to recover at 20%, 15% and 30% respectively.
Growth on the sale of busses was expected to fall by 30%, Riley said.
The structural and rational part of the South African economy was geared for growth, a key reason why the company was confident at its outlook for the sector in 2011.
"Capital inflows remain healthy, while interest rates remain low with a 0.5% increase probable towards the back end of the year. Corporate profits are generally healthy with corporate listings and activity on an upward trend."
The increase in sales predicted for 2011 was a "return to par" after the market over-corrected in 2009.