Rapid price hikes due to weak rand take toll on new vehicle sales
While new vehicle sales continued to weaken last month, sales of used vehicles have swelled, with a record number of finance applications having been fielded by one of the country’s leading vehicle finance houses.
With passenger vehicle sales to the public making up a significant portion of the overall market, figures released by the National Association of Automotive Manufacturers of South Africa (Naamsa) and vehicle finance specialists WesBank have painted a more damning picture of car sales.
Total industry sales for last month were 48 745 new vehicles, representing a year-on-year decline of 10.1%, while year-todate the industry is down 11.2%, with total sales of 459 486 new vehicles compared with 517 152 new vehicles sold in the same period last year.
With a year-on-year decline of 9.5%, total new passenger car sales for last month were 32 738 vehicles.
However, sales to rental and fleet companies comprised a significant 7 042 units, meaning that sales to the public were substantially less last month.
Wesbank motor retail chief executive Simphiwe Nghona said: “The new car market has been under pressure throughout the year, but receding consumer demand is even more pronounced.
“We’re seeing record numbers of applications for pre-owned vehicles. Consumers can get better value for money in the used market, where the average transaction value for financing a used car is nearly R100 000 less than a new car.
“October saw the highest-ever volumes for used vehicle finance, with 97 209 applications received,” he said, with 15.3% fewer new vehicle loan applications received via dealerships.
Nghona said affordability was influencing both new and used vehicle sales.
“New car prices have increased above CPI rates, based on the rand’s weakness over the last two years,” he said.
“In October, the average new car financed was 12.7% more expensive than the same period in 2015,” he said.
Eastern Cape Motor Group dealer principal Alan Percy said the pre-owned market was doing very well and prices had increased due to demand.
“There are, however, stock shortages. We do purchase from rental companies, but . . . they are holding on to their vehicles for longer,” he said.