Guarded good news for new vehicle sales
AFTER 14 months of a downward spiral the South African newvehicle market has finally made an upward swing, with January’s sales figures showing a 3.7 percent gain year on year.
Though the growth is modest, and comes off an extremely low base, the positive figures are a welcome sight for a traumatised market which has endured a weakening rand and harsh inflation for over a year. The marginal growth came mostly from rental and government sales, which saw 32.5% and 26.6% increases respectively. Sales at dealer level, where the bulk of vehicles are shifted, were down 3.6 percent compared to January 2016.
“Growth in the industry is always positive,” says Wesbank’s Rudolf Mahoney. “However, the January result should not be seen as indicative of a trend for this year. Consumer budgets remain under pressure, as seen in the dealer channel sales, and we should not rely on continued double-digit growth in the rental channel.”
The passenger vehicle market represented 36 794 of a total reported 50 333 sales in January, showing a healthy 4.7% rise compared to January 2016. Light commercials improved by 1.6% with 11 977 sales, while medium (493) and heavy (1069) commercials reflected 3% and 1.3% declines respectively.
Wesbank, the country’s biggest vehicle financier, added that applications for new vehicles were down 1% year on year, indicating that consumers are holding on to their cars for longer due to affordability concerns. The used car market continues to grow with finance applications growing by 7.3% in January. Used car finance applications outweighed new ones by 2.5 to one.
* In the wake of the recent fire scandal, sales of new Ford Kugas have dropped from an average of 172 a month over the last four months of 2016, to just 74 in January. The affected 1.6-litre version is no longer on the market but the controversy appears to have tainted the range. The drop in sales may also be because there is a facelifted Kuga version to be launched soon.