Used-car market rises while new-car sales decline
SIMPHIWE NGHONA Cash-strapped and budget-conscious consumers atempt to address affordability
Sales data released by South African automotive industry information provider the National Association of Automobile Manufacturers of South Africa (Naamsa) has noted that, while new-vehicle sales have declined by 6.9% since January 2015, data from vehicle finance and insurance provider Wesbank has shown that 70% of all finance applications received for January 2016 were for used vehicles.
Wesbank motor division CEO Simphiwe Nghona expects a continued shift to the used market throughout this year, as cash-strapped and budget-conscious consumers attempt to address affordability.
“The decline in new-vehicle sales comes as no surprise in the current economic climate, with consumer and business confidence at very low levels, as a result of a number of macroeconomic factors,” he states.
Wesbank recognises that all segments experienced a gradual decline, with passenger car sales only totalling 34 936, a year-on-year decline of 6.1%. Light commercial vehicle sales declined by 8.3% during the same period, with sales of 12 074 vehicles noted.
Vehicle sales through the dealer channel declined by 12.6% year-on-year, while government sales were down 27.4% for the same reporting period. In contrast, sales to the rental market saw a massive growth of 49.6% last month.
“The spike in rental sales is an anomaly, but is most likely due to rental companies choosing to reflect ahead of new-car price increases. Despite this positive activity in the rental market, total industry sales still saw a decline,” concludes Nghona.
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