New vehicle sales decline
South Africa’s new vehicle sales showed its largest decline of the year in July. According to the latest sales figures reported by the National Association of Automobile Manufacturers of South Africa (Naamsa), total market sales declined 6.1% last month.
Of the 54 112 new vehicles that were sold in July, 36 506 were passenger cars – representing an 8.8%, year-on-year, decline for this segment. Light commercial vehicle (LCV) sales saw a marginal increase, with a total of 15 090 sales – a year-on-year increase of 0.7%.
“Major competition and very attractive marketing incentives from manufacturers have driven LCV sales all year,” said Simphiwe Nghona, Executive Head of WesBank’s Motor Division. “Even though sales in this segment look relatively flat, they’re quite positive given the overall market conditions.” Consumer demand for vehicle finance remains strong, however with an all-time high in the volume of finance applications received by WesBank. A total of 138 485 applications were received in July. Finance applications for new vehicles grew 3.2%, year-on-year. Application volumes for used vehicles grew 8.6% for the same period, the result of consumers continuing to buy down or looking for better value in the used market. The Reserve Bank’s recent interest rate hike of 25 basis points (0.25%) will also affect heavily indebted consumers, who will have to spend more of their disposable income on servicing debt.