Rise in overall cost of mobility affects vehicle sales

2015-06-04 06:01

South Africa’s new vehicle sales continued to decline in May, according to the latest data from the National Association of Automobile Manufacturers of South Africa (Naamsa).

A total of 47 868 new vehicles were sold last month, representing a 3.2% decline, year-on-year.

“Over the last few months we’ve seen a rise in the overall cost of mobility. Fuel prices have increased 18% since the start of the year as a result of a weaker rand, and the Reserve Bank has warned of interest rate hikes in the coming months,” said Rudolf Mahoney, Head of Research at WesBank. “Factors such as these will continue to affect consumer confidence and put household budgets under even more pressure. For many consumers buying a new car may not be a priority in the immediate future.”

New vehicle price inflation (VPI) is currently at 7.6% (TransUnion Auto) and continues to outpace consumer price inflation (CPI), which is currently at 4.5%. This is mainly as a result of the continued weakening of the rand, as well as low consumer and business confidence levels, as indicated by the FNB Bureau of Economic Research (BER) and RMB BER confidence indices.

(-WesBank-)

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