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Car sales like to remain steady in 2013

4 Jan 2013

Motor industry executives believe that the local vehicle market will continue to grow - perhaps at a reduced rate - this year as customers and car manufacturers encounter various challenges in a changing environment.

Toyota SA's‚ chief executive Johan van Zyl‚ said he expected the market for new cars in 2013 to be "very similar" to last year's market.

"Locally‚ we expect that interest rates will remain where they are because of low economic growth in South Africa along with pressure on the balance of payments. This should support the local demand for vehicles‚" Van Zyl said.

"New product introductions remain a strong driver of local vehicle sales and we expect another bumper year in 2013‚ with many new vehicle introductions. This will apply especially in the latter part of the year‚" he said.

Volkswagen SA's spokesman Matt Gennrich expected single-digit growth for the year.

He cited the fact that many buyers are likely to enter the market this year as they had bought cars at the height of the last sales boom and were now looking to replace them.

"We're in a replacement cycle and buyers now have an asset and can get a decent trade-in price for their existing car and replace it with something else‚" Gennrich said.

He expected prices to start rising this year after several years of below-inflation price rises.

"For the last few years car prices have been falling in real terms‚" he said‚ adding that this year he expected to see more aggressive pricing.

Gennrich said he was expecting some economic growth in South Africa this year and, by implication, there would be more new entrants into the vehicle market.

"There has been a misconception that (last year) the market was driven by the rental firms but that's not really the case. The core part of the business‚ comes from the dealerships and is currently very healthy‚" he added.

Gennrich said he expected growth in the entry-level sector of the market but not for the premium segment.

However‚ Nissan SA's managing director Mike Whitfield said if companies kept up with aggressive incentives such as discounts‚ trade-in assistance and free extended warranties‚ the market would probably grow by about 5%.

"However‚ if the incentives fall away‚ we expect it to remain flat‚" Whitfield said.

Source: I-Net Bridge

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