Vehicle and asset finance group WesBank believes 2015 new vehicle sales will grow by 0.87%, to 650 031 units, compared with 2014, says motor division executive head Simphiwe Nghona.

Passenger car sales are expected to remain flat, at 0%, in 2015, with the sales of new bakkies and minibuses increasing by 3%, and the truck market inching up by 1.1%.

“Growth of passenger car sales seem to have hit a sort of artificial ceiling,” says Nghona.

“Any increase from current levels will only be possible in an environment where the [economic growth] of the country expands at much higher levels.”

However, Nghona notes that current passenger car sales are “still respectably high” compared with the recession slump a few years ago.

He says prevailing low interest rates continue to drive sales confidence for both consumers and dealers.

Marketing incentives from manufacturers are also helping to drive sales –  including trade-in assistance and cash-back packages – which help cover the shortfall when consumers choose to trade in vehicles.

And, while overall household debt is still high, the last 18 months have seen a consistent decline in this debt, which indicates that the pressures on consumer budgets are easing.

On the negative side, however, rand depreciation continues to affect vehicle sales.

Last year new car price inflation exceeded inflation, and after a small reprieve, fuel prices are on the rise again.

The knock-on economic effects of a weaker currency will lead to higher living costs, ultimately affecting consumers’ budgets and how soon – if at all – they will be in the market for a new car, explains Nghona.

Buyers who do find themselves in the car market may also opt for a pre-owned vehicle.

The increasing shift to used cars is a result of consumers knowing they can get better value for their money if they forego the luxury of a new car, says Nghona.

While car sales are set to remain stable, domestic sales of light commercial vehicles are expected to see the highest growth in 2015 as consumers substitute passenger cars with bakkies, and businesses replace their fleets – with the latter trend expected to make a strong showing in the second half of the year, he adds.

The growth in the truck market is also largely based on the replacement cycle.

“Overall, our vehicle sales forecast for 2015 is characterised by a market in which the positive and negative factors even out,” says Nghona.

“Notwithstanding the low expectation of growth, sustaining activity at these levels in current economic conditions would be a positive.”

WesBank forecast that the new vehicle market would be down by 0.6% in 2014, while the market dipped by 0.74% in the end.