Motor sales decline as effects of local interest rate hikes begin to show

Motor sales in SA continue to decline as the effects of last year's multiple interest rate hikes become apparent. Measured in nominal terms (current prices), motor trade sales decreased 2.7% year on year in January, Statistics SA data showed.

18 Mar 2016

Motor sales decline as effects of local interest rate hikes begin to show

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Seasonally adjusted motor trade sales decreased 2.4% in January 2016 compared with December 2015. This followed a stable month-on-month reading in December and growth of 1.1% in November. In the three months ended January 2016, seasonally adjusted motor trade sales increased by 0.2% compared with the previous three months. Motor trade sales increased by 0.3% in the three months ended January 2016 compared with the three months ended January 2015.

The data is in line with figures from the National Association of Automobile Manufacturers of SA (Naamsa). Naamsa reported a 6.1% drop in new vehicles sales in February.

"The interest rate increases we have experienced in the past year are starting to (filter) in now more than ever," said head of vehicle and asset finance at Standard Bank Nicholas Nkosi. The South African Reserve Bank has raised interest rates three times by a cumulative 100 basis points since July last year, to stave off rising inflation and economists expect more rate hikes this year.

The results of the monthly motor trade sales survey are used to compile estimates of the gross domestic product (GDP) and its components, which are used in monitoring the state of the economy and formulation of economic policy. These statistics are also used in the analysis of comparative business and industry performance.

Source: BDpro

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