Vehicle sales confidence drops further
WesBank|Equipment|Chris De Kock
© Reuse this
Credit availability among consumers and corporates remained one of the biggest hindrances to the growth of the vehicle sales market, Wesbank executive head of sales and marketing Chris de Kock said on Wednesday.
Speaking at the release of Wesbank’s quarterly vehicle sales confidence index (WVSCI), De Kock noted that confidence levels had dropped further to 4,2 in the quarter ended April, representing an 18% decline year-on-year.
The WVSCI had declined from 5,1 in April 2008, and from an already low level of 4,4 in the previous quarter, ended January 2009.
About 90% of respondents had indicated that the market was not active during the quarter.
Consumers’ decision to buy new vehicles was mainly influenced by credit factors and, to a lesser extent, mindset factors, highlighted Wesbank.
The vehicle financier said that a higher percentage of the population now had adverse credit records as a result of the volatility in the global economy, making it more difficult for them to access financing.
Further, many consumers still had a very high debt-to-income ratio, which affected their ability to afford new vehicles.
Consumers’ decision to buy new vehicles was also being influenced by higher new vehicle pricing, as well as uncertainty about the employment outlook.
However, the vehicle financier expected the 4,2 level to be the lowest level the WVSCI would reach in the current downward cycle, but De Kock conceded that it was difficult to forecast what might happen in light of the volatility in global economic conditions.
Nevertheless, there were some signs that conditions were starting to normalise, he said.
De Kock noted that credit availability would start to improve, as customers were deleveraging and paying off their debts to reach more manageable levels.
Further consolidation by dealers, and by original equipment manufacturers, would also start to benefit the industry, while the used car market would continue to support the industry.
De Kock expected the remainder of this year to be tough for dealers, but said that dealers were expecting to start seeing an improvement in conditions in the last quarter of the year and early 2010.
About 20% of respondents to the WVSCI had expected conditions to start improving in the next three months, while 63% were only expecting to see an improvement in the first quarter of 2010.
However, De Kock noted that the June WVSCI could show positive growth in confidence levels for the first time in a year.
Edited by: Mariaan Webb
© Reuse this
Comment Guidelines (150 word limit)
Other Automotive News
Temporary power generation services provider Aggreko has extended the contract for its 200 MW gas-fired power project in Côte d'Ivoire by three years, with the option to extend this by a further two years.
Troubled South African State power utility Eskom should place emphasis on stability ahead of improvement, GE chairperson and CEO Jeffrey Immelt suggested on Monday. Speaking at the Gordon Institute of Business Science (GIBS) in Johannesburg, the head of the...
A Competition Tribunal hearing into alleged cartel activity and price-fixing by several companies in the wire and wire products manufacturing industry was again postponed on Monday pending a decision by the Competition Appeal Court (CAC). Respondents Allens Meshco,...
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
The 3D printers have a clear upgrade path to eventually print in wood, ceramics and metal-alloys
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...
Do you transport, as a haulier or consignor, more than 500 t of cargo a month by road? If so, brace yourself for a raft of new onerous, but rather vague transport regulations, warns Norton Rose Fulbright South Africa associate Peter Lamb. The National Road Traffic...
A stretch of the N3 highway between Durban and Johannesburg will be upgraded, starting in the middle of 2015, in a contract valued at around R400-million, says South African National Roads Agency Limited (Sanral) Eastern Region design and construction manager Ravi...
The modernisation of public transport infrastructure is among some of the top priorities for Gauteng and forms part of the provincial department’s ten-pillar programme to “radically” transform, modernise and reindustrialise Gauteng. Speaking at the Gauteng Industrial...
Article contains comments
Article contains comments