• New vehicle sales remained flat in July.
• It could two years for the market to show improvement.
• Fuel price increases will continue to pinch wallets.
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New vehicle sales were largely flat in July, showing similar numbers to those of June 2020.
However, most worrying to note is that July was a very long trading month, and vehicle sales were still almost 30% down on the previous year.
According to NADA's predictions, there won't be a quick recovery from this new reality any time soon, and it could take a minimum of one to two years before we see any significant improvement in new vehicle sales.
Consumers under pressure
Consumers are still under massive pressure to meet their monthly household expenses; taking a cautious approach to making big-ticket vehicle purchases and committing to large financial payments.
While there is some reprieve from recent interest rate cuts, rising fuel prices and general inflation will continue to pinch wallets into the foreseeable future.
On the positive side, many consumers will have resumed paying deferred installments in July, and considering the pressure they are under and that there is still an appetite for new cars in the current environment, a flat month from June to July was very encouraging.
Mark Dommisse is the chairperson of the National Automobile Dealers' Association (NADA).