Vehicle exports move into top gear

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"The uptick is in sharp contrast to previous months when export growth dropped significantly. The drop came as something of a shock to the industry, which was already on the back foot thanks to a decline in local sales. Now it would appear that export sales might prove to be the new car industry's saving grace in 2016."

According to statistics, domestic sales dropped 13.2% from 30,026 in April 2015 to 26,077 in April 2016, extending the downward trend that started at the beginning of 2016.

"It's widely believed that the decline in new local car sales will continue for at least another 18 months, thanks in large part to rising interest rates, poor business sentiment and rising fuel prices," said Lazarus.

"The fact that it is estimated that new car prices will increase by as much as 20% over the course of the year isn't helping the argument for new car purchases," he said.

Given the economic climate, most people were carefully considering the true costs of car ownership. Many - particularly students, young professionals and new families - were considering a reasonably priced, fuel-efficient model, he said.

Evidence of a trend towards economical, second-hand cars had already manifested. Wesbank recently reported that applications for new car finance had fallen 7% as applications for used car finance rose 9.26%.

Source: Business Day