The South African new vehicle market was likely to reach around 630 000 units in 2014, down from the 650 000 units recorded in 2013, said Toyota South Africa Motors (TSAM) president and CEO Dr Johan van Zyl on Thursday.

Van Zyl was also president of the National Association of Automobile Manufacturers of South Africa (Naamsa).

TSAM marketing and sales senior VP Calvyn Hamman expected the domestic new vehicle market to dip further in 2015, to around 610 000 units. The 2016 market should remain flat, with slow growth again possible in 2017.

“We are not in a downwards cycle,” said Hamman. “The market is more nervous than negative.”

“This is not doom and gloom,” added Van Zyl.

The reasons for the downturn were varied, but included issues of affordability, coupled to a cycle of rising interest rates, which impacted on consumer confidence.

The failure of African Bank Investments Limited (ABIL) also did not help, said Van Zyl.

“ABIL did put some liquidity in the market, so it will have an impact on the market – how big an impact we can only guess at this stage.”

He believed ABIL supported the used car market, through unsecured lending, more than the new vehicle market.

However, he warned that ABIL’s failure would probably place a damper on how freely other financial institutions make credit available, which could affect the new vehicle market.

“These institutions may become more conservative in their lending.”

Van Zyl said it was feasible to achieve an uptick in new vehicle sales in 2017, should positive sentiment return on the back of increased economic growth ¬- which was possible now that the mining and motor industries had returned to work following prolonged strikes. The manufacturing sector should also work to deliver on its long-standing promise of increased exports, as it had stated was possible with a weaker rand.

Van Zyl was also hopeful that the South African economy would have reached the top of the inflation and interest rate cycle by the end of next year, which should assist the new vehicle market.

He said it was important for business not to view the current negative economic conditions as the end of the world, but rather as “a process to work through”.