Used car sales soar as consumer budgets take knock

(Duncan Alfreds, Fin24)
(Duncan Alfreds, Fin24)

Cape Town - Despite shrinking consumer spending in the past couple of months, total motor trade sales climbed by 9% year-on-year in April 2016, according to Statistics South Africa’s latest data.

Measured in current prices, used vehicle sales showed the biggest increase at 20.3%, while new vehicle sales grew at 11.5%. The sales of accessories accounted for 13.0% and workshop income for 11.9%.

In March this year, car sales contracted by 3.3%, but recovered in April to show a month-on-month increase of 3.4%.

However, according to data from the WesBank and National Association of Automobile Manufacturers of SA (Naamsa) new vehicle sales fell by 10.3%.

WesBank forecast that total industry new vehicle sales would decline 12% for the year and that there would be a stronger growth in used car sales, as the weaker rand had resulted in steep new car price inflation.

Expected interest rate hikes and higher petrol prices are hamstringing consumer budgets, which would put further downward pressure on new car sales. 

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