Stats show more motorists buying down
SOUTH African motorists are buying down as they feel the pinch of the weaker rand and last year’s interest rate increase.
The latest numbers from the National Association of Automobile Manufacturers of South Africa (Naamsa) showed consumers were favouring cheaper, smaller cars, Wes-Bank’s head of research, Rudolf Mahoney, said yesterday.
Naamsa figures showed 1.5% more new cars were sold last month than a year ago.
But sales to the car rental industry skewed the data, Standard Bank vehicle and asset finance head Nicholas Nkosi said.
“While the February passenger vehicle numbers show a slight improvement year on year, this is not necessarily a true reflection of . . . consumers buying more vehicles, as . . . the car rental industry contributed 9.9% of the overall passenger vehicles sales in February,” Nkosi said.
Individual car buyers found it tougher after the interest rate increased by 0.75 percentage points last year.
And fuel prices shot up to more than R14/l last year.
Mahoney said the applications for financing at Wes-Bank reflected strong demand for used cars.
Applications for used cars were 15% higher than a year ago, and the growth rate was in double digits for most of last year, he said. New car applications were up 7%.
Nkosi reported a similar trend. Both new and used vehicle sales grew year on year, but new car sales by only 8.2% and used by 32.9%.
This was because the price gap was widening and consumers were finding better value in the used car market, Mahoney said.
Inflation on new cars, thanks to the weaker rand, was about 8% last year, while used cars only became about 2% dearer.
When people do buy a new car it is likely to be a small one. At the beginning of last year, only about 22% of new cars sold were in the very small A-segment of the market. Now small cars account for 30% of all passenger vehicle sales.