The new vehicle market in South Africa will probably end the year flat compared with 2013, says Standard Bank Vehicle and Asset Finance personal markets head Nicholas Nkosi.
The biggest impact on this year’s sales comes from a weaker rand, which continues to push up new vehicle prices, he adds.
“Despite this, sales were surprisingly resilient.”
This year also saw a strong return of the used car market, on the back of an increase in new car prices.
“People are looking for good deals; for cars with all the bells and whistles.”
Nkosi expects both trends to continue into 2015.
He warns that consumers have to brace themselves for more price increases, especially in the light of the rand’s sudden drop towards the end 2014.
This decline will further aid the used car market in the new year, assisted by a growing acceptance of used vehicles in South Africa.
Nkosi also expects consumers to continue stretching their repayment terms in 2015, as has been the case in 2014.
He believes South African buyers will remain under pressure in 2015, despite the recent drop in the petrol price, as inflation and increasing electricity prices will take their toll on household income.
Good news in 2015 will flow largely from vehicle exports continuing their upward curve.
“Exports have performed really well in 2014, and we expect this trend to continue,” says Nkosi.
However, he warns that strikes and load shedding may see South Africa become an increasingly uncompetitive production base compared with major global assembly sites, such as India.
Looking to 2015, Nkosi expects the new vehicle market to contract compared with 2014. While passenger car sales will be down, the truck market may end 2015 flat on 2014.
“The key drivers in 2015 will be the exchange rate putting pressure on new car prices, and general inflation and electricity price hikes placing the consumer under further strain.”