New vehicle models boast sales confidence
Findings in the 27th edition of the WesBank Vehicle sales Confidence Indicator (WVsCI), presented by Simphiwe Nghona, the new general manager of the motor division at WesBank, provide insight into dealer confidence levels in the new vehicle market. The third-quarter sales confidence indicator shows that dealer confidence is at a high for 2014 and at a level last seen April 2013. The sales outlook is positive, as with the previous quarter, despite July’s slight interest rate hike of 25 basis points. Here, dealers expect business sales to improve over the next three- and six-month periods. Said Nghona,“It looks like we’ve seen the worst of the 2014 sales decline, there has been a remarkable recovery in the last quarter.” He added, “If sales continue to reflect confidence levels, the damage could be limited, however the new vehicle market will still end this year lower than last, as forecast.” Confidence and the associated outlook are being positively influenced by new model launches, a stable interest rate that is still relatively low, and marketing activities by OEMs. Even though 2014 has only seen two interest rate hikes, totalling 75 basis points and bringing the prime rate to 9.25%, the interest rate is still seen as the biggest factor that is anticipated to negatively influence activity on showroom floors. “Uncertainty around strikes is also cited as a concern. Future industrial action will negatively impact economic growth, resulting in a weaker exchange rate, higher new vehicle prices, and increased inflation,” he added.