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
Updated 1 hour 40 minutes ago
The Labour Court in Johannesburg has set aside the 2011-2014 metal sector wage agreement, the National Employers' Association of SA (Neasa) said on Thursday.
The 2011-2014 wage deal was the result of an agreement between the Steel and Engineering Industries...
South African cement firm PPC on Wednesday named a mining industry veteran as chief executive, ending a three-month leadership vacuum that has hit its shares.
PPC's former CE Ketso Gordhan abruptly resigned in September after clashing with the board. He then...
anzania's attorney general resigned late on Tuesday, becoming the first political casualty in an energy corruption scandal in the east African country that has led Western donors to delay aid and weakened the currency.
The resignation followed a vote in parliament...
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
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
TO BE PHASED INTO SERVICE The first MeerKAT dish, with another 63 to come
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
Wireless networks should enable users to engage and must provide relevant information to them based on their activity and location
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...
Murray & Roberts (M&R) Infrastructure has been awarded a contract by the North West provincial government’s Department of Public Works and Roads to upgrade 58.4 km of gravel roads in the Ganyesa area, north-west of Vryburg, by May 2016.
Transport Minister Dipuo Peters has published various amendments to the Gauteng e-Road regulations in the Government Gazette for public comment. Among the proposed amendments was a requirement that “foreigners” now had to “comply with the provisions relating to the...
Construction has started on the Ekurhuleni metropolitan municipality’s new Integrated Rapid Public Transport Network (IRPTN) service that would connect the nine separate towns of Gauteng’s East Rand, through integrating new bus networks, existing bus services,...
Article contains comments