Another tough year for mo­tor in­dus­try

The Witness - Wheels - - MOTORING -

TOWN — The South African mo­tor­ing in­dus­try faced yet another chal­leng­ing quar­ter, ac­cord­ing to the lat­est Tran­sUnion SA Ve­hi­cle Pric­ing In­dex (VPI) for used and new ve­hi­cle sales.

The Q3 2016 VPI found that the rate of new and used ve­hi­cle pric­ing in­creased fur­ther to 9,9% and 2,8% in Q3 2016, from 8,4% and 2,7% in Q2 2016 re­spec­tively, which sug­gests used­car sales vol­umes will con­tinue to rise.

The VPI mea­sures the re­la­tion­ship be­tween the year-on-year in­crease in

“This has, how­ever, seen the de­mand for used ve­hi­cles con­tinue to in­crease con­sid­er­ing the affordability chal­lenges in the new ve­hi­cle market.

“Con­sumers tend to look for cheaper cars or hold on to their ex­ist­ing ve­hi­cles for longer than nor­mal. This yearly trend continues with a new to used ve­hi­cle ra­tio of 2,93 in Q3 2016, as com­pared with 1,71 in Q3 2015.

“This means that for ev­ery one new ve­hi­cle fi­nanced, there were 2,93 used ve­hi­cles fi­nanced.”

— WR. ve­hi­cle pric­ing for new and used ve­hi­cles, from a bas­ket of pas­sen­ger ve­hi­cles that in­cor­po­rates the top 15 vol­ume man­u­fac­tur­ers. Ve­hi­cle sales data col­lated from across the in­dus­try is used to cre­ate the in­dex.

Ac­cord­ing to the re­port, the fur­ther in­crease of new ve­hi­cle prices can be at­trib­uted to a de­layed re­ac­tion to the rand weak­ness and on­go­ing poor eco­nomic con­di­tions.

Der­ick de Vries, CEO: Auto In­for­ma­tion So­lu­tions at Tran­sUnion, said: “The on­go­ing re­ces­sion in the domesCAPE tic new-ve­hi­cle market, com­bined with an ex­tremely dif­fi­cult eco­nomic en­vi­ron­ment, points to an un­favourable short- to medium-term out­look.

“House­hold cash-flow mea­sures show that it is the weak­est it’s been since 2010, and is re­flect­ing no room for con­sumers to take on ad­di­tional debt. Low lev­els of both con­sumer and business con­fi­dence, com­bined with new-ve­hi­cle pric­ing re­main­ing above CPI [Con­sumer Price In­dex], will con­tinue to add se­vere pres­sure to the new ve­hi­cle market.

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