Uptick in used car sales

Johannesburg - While new car sales in November dropped by 2.5% compared to the same period last year, South Africa's major banks are reporting an increase in used car sales.

The head of Standard Bank's vehicle and asset finance division, Nicholas Nkosi, said: "In November 2014 new business experienced positive month-on-month growth of 4.7% in the used vehicle market.

"In contrast [the] new vehicle market declined by 1.5% month-on-month."

Latest figures

Figures released by National Association of Automobile Manufacturers of SA (Naamsa) on Tuesday showed new car sales in November declined by 2.5% compared to November last year.

However, industry sales in all segments increased by 0.9%, it reported.

Nkosi said this was a marginal improvement.

"Passenger vehicles continue to show strain as evidenced by the latest figures. This is anticipated to continue through 2015."

Head of research at Wesbank, Rudolph Mahoney, said the main reason for the 0.9% increase was that sales of light commercial vehicles increased by 10.8%.

Car prices

"[The] market has now grown consecutively for three months, which is quite positive, because we started the first half of the year in the negative," he said.

Mahoney said there had been a significant increase in applications for finance for used cars at Wesbank. He attributed this to the increase in new car prices due to the weak rand.

Nedbank's economic unit predicted only modest vehicles sales for 2015.

"The outlook for vehicle sales into 2015 remains modest due to weak economic growth, fragile confidence, still high inflation and weak household finances," it said in a statement.