SA new car sales down

2015-08-25 06:02
The July 2015 aggregate new vehicle sales at 54 112 units were down 6.1% from the 57 636 vehicles sold in July 2014. Overall, out of the total reported industry sales of 54 112 vehicles, an estimated 44 564 units or 82.4% represented dealer sales, 11

The July 2015 aggregate new vehicle sales at 54 112 units were down 6.1% from the 57 636 vehicles sold in July 2014. Overall, out of the total reported industry sales of 54 112 vehicles, an estimated 44 564 units or 82.4% represented dealer sales, 11

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New vehicle sales has declined by 6% in July and the National Association of Automobile Manufacturers of South Africa (Naamsa) commented that the slow-down in domestic new vehicle sales had continued with new car and heavy truck sales compared to July 2014.

New car sales registered the largest year-to-date monthly decline.

Export sales of new vehicles showed an improvement with a year-on-year gain.

New car sales decline

Naamsa claims sales of new cars in the consumer driven new car market at 36 506 units reflected a substantial decline of 3 509 units or a fall of 8.8% compared to the 40 015 new cars sold in July 2014.

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%.

‘Very attractive market’

Simphiwe Nghona, WesBank’s Motor Division executive head, said: “Major competition and very attractive marketing incentives from manufacturers have driven LCV sales all year. Even though sales in this segment look relatively flat, they’re quite positive given the overall market conditions.”

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.

WesBank also advises consumers to not plan their budgets around August’s drop in fuel prices. The petrol and diesel prices are influenced by a depreciating rand and international oil prices – both volatile factors that could see prices increase in the coming months. The relief from lower fuel prices will most likely be short-lived.

Nghona said: “Given the prevailing economic conditions, consumers who are currently in the market for a new car should consider the long-term impact on their budgets, and carefully structure their finance contracts.

“They should use large deposits to help lower the monthly instalment amounts, and consider a fixed interest rate to safeguard themselves against future interest rate hikes. Longer repayment terms could also assist with affordability, but buyers should be very cautious when considering balloon payments. Insurance and maintenance costs should also be included in mobility budgets.”

– wheels24.co.za

New vehicle sales has declined by 6% in July and the National Association of Automobile Manufacturers of South Africa (Naamsa) commented that the slow-down in domestic new vehicle sales had continued with new car and heavy truck sales compared to July 2014.

New car sales registered the largest year-to-date monthly decline.

Export sales of new vehicles showed an improvement with a year-on-year gain.

New car sales decline

Naamsa claims sales of new cars in the consumer driven new car market at 36 506 units reflected a substantial decline of 3 509 units or a fall of 8.8% compared to the 40 015 new cars sold in July 2014.

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%.

‘Very attractive market’

Simphiwe Nghona, WesBank’s Motor Division executive head, said: “Major competition and very attractive marketing incentives from manufacturers have driven LCV sales all year. 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, says WesBank, however with an all-time high in the volume of finance applications received. 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. Household debt levels remain high and consumer credit profiles are deteriorating. New affordability rules under the National Credit Act have seen a decline in the number of approvals, as these consumers are unable to qualify for more credit. WesBank also advises consumers to not plan their budgets around August’s drop in fuel prices. The petrol and diesel prices are influenced by a depreciating rand and international oil prices – both volatile factors that could see prices increase in the coming months. The relief from lower fuel prices will be short-lived.

Nghona said: “Given the prevailing economic conditions, consumers who are currently in the market for a new car should consider the long-term impact on their budgets, and carefully structure their finance contracts. They should use large deposits to help lower the monthly instalment amounts, and consider a fixed interest rate to safeguard themselves against future interest rate hikes. Longer repayment terms could also assist with affordability, but buyers should be very cautious when considering balloon payments. Insurance and maintenance costs should also be included in mobility budgets.”

Domestic sales of new light commercial vehicles, bakkies and mini buses during July 2015 at 15 090 units reflected a marginal improvement of 111 units or a gain of 0.7%.

– wheels24.co.za

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