Publications
Partners
Cape Town – Despite low consumer confidence, new vehicle sales continued its upward trend in August, showing year-on-year growth of 6.7%, according to the latest sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa).
Sales statistics for August reflect a continuing recovery in South Africa’s new vehicle market with total sales of 49 222 new vehicles. This is the third consecutive month of sales growth resulting in a 0.6% increase in year-to-date sales.
This growth was mainly driven by consumer buying patterns. Passenger car sales through the dealer channel grew 11.2%, while light commercial vehicle (LCV) sales through dealers were up 6.7%, year-on-year.
“This growth is extremely positive,” says Rudolf Mahoney, Head of Brand and Communications, WesBank.
READ: SA's downgrades and your car payments
“The shift back to new (vehicles) was expected and inevitable, especially with a dwindling supply of quality used vehicles,” he says.
In addition, new vehicle price inflation is slowing down. “It’s evident that manufacturers and dealers have come to realise that right now it’s a value-for-money play, and are offering highly attractive incentives to attract customers into the new car market,” according to Mahoney.
Strong activity in the used vehicle market over the last 24 months has resulted in depleting stock levels of quality used cars, with demand driving up prices in this market.
In August, the average value of a used vehicle deal was 8.4% higher than the same period in 2016.
WesBank’s book data indicates that used car prices grew an average of 7.9% over the past three months.
Mahoney points out that interest rates are also lower, which has had a significant positive impact on consumer sentiment and willingness to apply for credit.
“Further rate cuts are anticipated for September and this will stimulate the market for the remainder of 2017,” he says.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
