Ve­hi­cle sales slightly up

The Star Early Edition - - MOTORING - MO­TOR­ING STAFF

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

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