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Rise in car sales just a blip in downward slide
New vehicle sales grew 0.4% last month compared to the corresponding month last year, the first rise in four months.
© Tomasz-Zajda – za.fotolia.com
But the marginal increase was a blip on an otherwise remorseless downward market trend, Nicholas Nkosi, head of vehicle and asset finance at Standard Bank, said on Tuesday, 1 December.
It is the first year-on-year improvement in the second half of 2015, after the three previous months showed declines of between 8% and 9%. Any sort of rise is welcome but Nkosi said: "Let's not celebrate yet.
"My advice to consumers is: buckle up, we are all in for a very tough 2016."
The recent interest rate rise of 0.25% came too late to have much effect on sales in November.
However, National Association of Automobile Manufacturers of SA (Naamsa) director Nico Vermeulen said the general upward cycle was bound to kick in on affordability and disposable income. WesBank's Rudolf Mahoney added that the drought, and its damaging consequences for the agricultural sector would also affect vehicle sales.
He said last month's sales were bolstered by improved car rental business, which grew 13%. Sales to this sector had fallen in recent months, partly because of lower tourist numbers caused by draconian new visa rules.
But now companies had decided to stock up before the holiday season.
Dealer sales to consumers also improved in November. Intense market competition, offering discounts and innovative finance deals, continued to draw in buyers. "Prices are going up but monthly instalments are coming down," said Mahoney.
Nkosi added that over the past year, the average finance contract term had increased from 68 months to 70 months.
Mahoney said some buyers were taking pre-emptive action before expected year-end price increases. Based on conversations with motor companies, he hinted that by the time people came back from holidays in January, new passenger-vehicle prices were likely to have risen 5%-10%.
Source: Business Day
Source: I-Net Bridge
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