Vehicle sales slightly up
NEW-VEHICLE sales in South Africa recovered slightly during June, with 45 369 vehicles finding new owners to represent 0.9% growth compared to the same month last year.
However year-to-date new-vehicle sales remain subdued, with a 1.3% decline for the first half of 2017.
At 14 278 units sold, light commercial vehicles (LCVs) were up an encouraging 8% last month compared to June 2016, but passenger cars (28 639 units) were 2.2% down.
June’s positive sales growth was driven by good sales in the dealer channel, where passenger cars and LCVs grew 4.3% and 5.7%, respectively. Demand for LCVs also grew 74.8% through the government channel and 25.7% in the rental channel.
“Growth in the dealer channel was clearly fuelled by aggressive marketing in the form of sales incentives and end-of-quarter deals,” said Rudolf Mahoney, Head of Brand and Communications at WesBank. “The strong LCV sales figure is attributed to these being both recreational vehicles for consumers as well sought-after vehicles for businesses and government.”
WesBank reported that finance application volumes for new vehicles grew 7.6% last month. However, this was off a low base: in June 2016 application volumes had plummeted 19%. The 1.3% decline in demand for usedvehicle finance also correlates with the sales data and enticing deals in the newvehicle market.
Consumers in the newvehicle market are also spending more than ever, according to WesBank’s data. In June, the average price for a new vehicle was R300 181 – breaking the R300 000 mark for the first time. At the same time, consumers are also extending all options to aid affordability.
Average contract periods have risen to 70.07 months and demand for balloon payments has seen them being included in 30% of all finance contracts – the highest figure yet.
Despite the slight growth in new-vehicle sales, there is angst among consumers in an uncertain economy. The demand for fixed interest rates has risen 26% since March this year, with 63.4% of all contracts now using fixed rates.
The outlook for the second half of the year remained uncertain, according to the National Association of Automobile Manufacturers of South Africa (Naamsa). Political tensions and subdued economic growth prospects continued to impact negatively on business confidence and consumer sentiment, the association said, and predicted that newvehicle sales for 2017 were likely to remain flat at best. On the other hand, vehicle exports over the balance of the year should benefit from expectations of continued improvement in global growth to around 3.6%.
The Ford Ranger at 3333 units was SA’s best selling vehicle last month, followed by the Toyota Hilux (3161) and Volkswagen Polo Vivo (2516). - Motoring Staff