“The market is not good at all; it is still very tough out there, but there is a sense that there is a little bit more activity out there on showroom floors,” said vehicle financier Wesbank sales and marketing executive head Chris de Kock on Wednesday. “Wesbank believes we have reached the bottom of the market.”

He announced the newest Wesbank Vehicle Sales Confidence Indicator results in Johannesburg, which, at 4,3 out of ten, was a marginal improvement on the 4,2 recorded in April.

The indicator measures current activity and future confidence in the South African automotive market, and acts as an assessment of sentiment in the industry. It includes the opinions of 250 dealerships nationwide.

New vehicle sales in South Africa had fallen, to date, by more than 32% in 2009 compared with last year.

When asked what factors influenced current activity in the market negatively, dealers singled out credit (at 80%) as the largest culprit. This included customers not receiving credit, and consumers not being able to afford the vehicle they want.

De Kock said there were early signs that circumstances were starting to change, though.

While dealers and manufacturers alike had been complaining since the beginning of the year that banks were stymying the vehicle market by too rigourous an approach to credit approval, De Kock acknowledged that “credit remains a major factor”.

However, he added that “a loosening of credit approval is anticipated. Our [Wesbank's] credit appetite has started to get more aggressive than it was a quarter ago.”

He said Wesbank's credit approval rating to vehicle buyers were as low as 21% of applications following the implementation of the National Credit Act (NCA) in 2007, which legislated much stricter lending criteria, and then moving to 23%, 24% during the peak of the economic crisis.

“We are at a 28% credit approval rate now,” said De Kock.

Defending the decision to loosen lending criteria – as reckless lending had been credited with creating the global economic crisis in the first place – he noted that the credit market was much different post-NCA, as banks now had sight of consumers' complete debt burden with all financial institutions.

“The way we give credit now is very different than the way we provided credit before,” said De Kock.

“This kind of downturn happens once in a hundred years. It is was very difficult to predict,” he added.

De Kock also noted that vehicle repossessions were easing, another indication that the market had reached its bottom.

“Repossessions are 20% off their peak. We are at 1 650 a month now, down from 2 250 a month in September last year.”