Auto dealers strongly upbeat about sales outlook in 2012

2012-02-24 00:00

CONFIDENCE levels among auto dealers remained strong in the first quarter of the year, states major asset financier WesBank.

While sales growth is unlikely to reach the double-digit highs of the past year, the industry is upbeat about the year ahead.

The latest WesBank vehicle sales confidence indicator for the first quarter of 2012 increased to 6,4 out of 10 compared to 6,1 in the final quarter of 2011.

Chris de Kock, executive head of sales and marketing at WesBank, said the increase in confidence among dealers seemed to show that the high levels of sales activity in the automotive sector last year had continued into 2012.

The latest indicator results also revealed the highest ever confidence levels for future vehicle sales activity, reaching 7,1 and 7,4 for the next three and six months respectively.

“WesBank book data … shows an increase of more than six percent in monthly [credit] applications in January 2012 to 98 000, compared to the same month last year.”

More than one in three (34%) dealers cite new products and supply of stock as the driving factor for continued activity in car sales, while 7,5% cite interest rates, up from just 3,3% in the previous quarter.

“The low interest rate environment has supported sustained growth in the local automotive industry during the last year and we expect this low rate cycle to continue for most of 2012,.

“However, speculation of a possible rise in interest rates later in the year may act to curb consumer buying down the line.”

— Business Editor.

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