WesBank trims car sales growth estimates

WesBank executive head of sales and marketing Chris de Kock told I-Net Bridge/BusinessLIVE on Tuesday that the vehicle financier expected vehicle sales in the country to grow by 10%-11% by the end of the calendar year, down from the 15.2% forecast early this year.

Releasing the latest vehicle sales confidence report, WesBank noted a drop in confidence among the dealers for the first time this year.

"We think the industry has reached maturity stage in the current cycle in terms of vehicle sales," said De Kock.

Confidence levels dropped to 6.1 out of 10 in the third quarter, from the 6.5 in the second quarter.

Strong momentum unlikely to be repeated

The indicator polls over 250 new car dealerships throughout SA on issues such as current and expected sales activity levels, as well as factors affecting purchasing decisions among buyers.

De Kock said the strong growth momentum in the local vehicle sales market experienced in the first half of this year would likely not be repeated due to rising consumer price inflation putting additional pressure on consumer incomes.

The survey also revealed future dealership confidence levels in sales activity of 6.8 and 7.1 for the next three months and six months respectively. "These strongly anticipated future sales activity levels indicate that the remainder of 2011 is likely to continue along the positive growth path established so far this year, albeit at a slower rate."

De Kock said factors such as mounting global economic uncertainty, rising unemployment and growing personal debt would start to affect consumer sentiment towards the end of the year, while rising interest rate pressure will start impeding vehicle sales in 2012.

Meanwhile, new vehicle sales grew at a slower pace in July, recording an increase of 10.5% to 45 703 vehicles in the month from 41 345 units sold in the corresponding period last year, according to the National Association of Automobile Manufacturers of SA.