However this was considered to be a "seasonal" drop and WesBank pointed out that year-on-year‚ dealer confidence was significantly up.
As a result‚ WesBank's head of sales and marketing‚ Chris de Kock told I-Net Bridge that he expected the market to grow by about 2% this year and that "we should be delighted with that"‚ given how "out of sync" this was with the rest of the country.
"Growth in new vehicle sales is normalising but remains robust considering the high base that was established over the past three years. Overall‚ dealer confidence remains high and we have had a better than expected start to the year‚" De Kock said in a press release.
De Kock said positive sentiment among car dealers could be attributed to the launch of new models at reasonable prices.
WesBank said that 43% of dealers believed this would have the biggest effect on sales over the next three months‚ while 38% of dealers cited it as the main factor for sales growth in the next six months.
"It's easy to understand‚" De Kock said. "Customers can get a new car for the same repayments as they had on their old car." He said that new car inflation was "really good" and that interest rates remained low.
In reference to the buy-down trend‚ De Kock said people could "save money by buying a new car".
He said that in real terms "cars are getting cheaper for South Africans"‚ but noted that the cost of fuel was problematic and had been flagged by dealers as a concern for the rest of the year.
WesBank said 23% of dealers fuel costs as the biggest issue now and over the next three to six months.
De Kock said the weakness of the rand and the inevitable effect on car inflation had not been flagged by dealers‚ which he found "surprising".
Various concerns lie in wait for the industry according to De Kock‚ most notably the fact that "the average Joe now finances his car over 72 months". This had the effect of taking a customer off the forecourt for an extended period of time and "hits the replacement cycle".
"If you think logically‚ the party has got to come to an end. The base effect from the past couple of years will kick eat away at the growth. We should be delighted with 2%‚" De Kock said.
"While we still expect strong sales volumes‚ we continue to believe that we will see low single digit growth this year. Looking at the feedback from dealers‚ as well as WesBank's own book data‚ we predict that the industry will remain healthy. We see good activity in the market and WesBank applications are performing strongly‚" De Kock added.
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