According to the National Association of Automobile Manufacturers of South Africa (Naamsa), only 47 399 new vehicles were sold in September, representing a 14.3% decline compared with the same period in 2015. Thus far this year total industry sales are down 11.3%.
"It is not really unexpected," said Rudolf Mahoney, Head of Brand and Communications, WesBank Marketing. "We forecasted at the start of this year that the market would shrink by around 12% in 2016. It seems like we are heading in that direction," he continued.
"If you look at WesBank's own data," he said, "it is clear that the trend to used is continuing." According to Mahoney there has been a 17.8% decline in new vehicle financing applications, but a 6.7% increase for used cars. Increasingly finance applications are also turned down– currently less than half of the applications that WesBank receives are successful.
Affordability is a major factor that is driving consumers to exploring the used car market, Mahoney explained. New car prices have dramatically increased over the past 12 months, with the average price of a new financed car in September coming to R293 343, a whopping 18% more than last year. Household income has simply not kept pace with not only rising new vehicle costs, but all rising prices, so consumers are forced to either postpone their purchases, or look at the used-vehicle market. But even there prices are rising because of strong demand– the average deal value for a used car in September was R191 236, an increase of 8.7%
“History has shown that the performance of the new vehicle market is cyclical, and we are nearing the bottom of this cycle. However, in the medium term the future of the market will be determined by the verdict from the international ratings agencies,” said SimphiweNghona, CEO of Motor Retail at WesBank. “A downgrade in the country’s debt rating will have a number of far-reaching consequences that will have direct and indirect impacts on vehicle prices and consumer budgets.”
Passenger Cars
In total 31 957 new cars were sold in September, a decline of 14.4% compared with the same month last year. The top selling passenger vehicles were;
Volkswagen Polo Vivo—2 822 unitsVolkswagen Polo— 2 426 unitsToyota Corolla/Auris/Quest— 2 061 unitsFord Fiesta— 1 190 unitsToyota Fortuner— 1 180 unitsFord EcoSport— 987 unitsToyota Etios— 947 unitsRenault Sandero— 625 unitsToyota Avanza— 572 unitsBMW 3 Series— 487 units
* Note that Mercedes-Benz and the AMH brands (Hyundai, Kia etc.) do not report detailed sales figures and their model listings are therefore not included.
Light Commercial Vehicles
With only 12 879 LCVs sold in September, this segment of the market recorded a sharp decline of 14.8% compared with the same month last year. Manybusinesseshave cut back on capital investments and prefer to rather spend more on maintenance in the current economic climate. The top sellers were;
Toyota Hilux— 3 063 unitsFord Ranger— 2 437 unitsToyota Quantum— 1 329 unitsChevrolet Ute— 1 126 unitsNissan NP200— 1 020 units
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