January new-vehicle sales increased by 3.7%, reaching 50 333 units, compared with the same month last year –the first sales increase in 14 months.

However, warns asset finance group WesBank, this positive performance was the result of growth in the rental and government channels, where sales were up 32.5% and 26.6% respectively. Sales through the dealer channel – where consumers are active, and the source of the majority of sales – were down 3.6%.

“Growth in the industry is always positive; however, the January results should not be seen as indicative of a trend for this year,” says WesBank brand and communications head Rudolf Mahoney.

“Consumer budgets remain under pressure, as seen in the dealer channel sales, and we should not rely on continued double-digit growth in the rental channel.”

WesBank data shows that demand for new vehicles declined slightly in January, with finance applications down 1% year-on-year, highlighting the continued trend of consumers delaying new car purchases for longer.

Demand for used cars remains strong, according to application volumes, which grew 7.3%, compared with January last year.

Used vehicle finance applications outnumbered new-vehicle finance applications 2.5:1.

WesBank anticipates that vehicle price inflation and interest rates will remain stable throughout 2017, which will go some way towards restoring consumer confidence.

However, fuel prices could start playing a bigger role in mobility costs this year, which will affect affordability negatively.

January new-passenger car sales improved by 4.7% to 36 794 units.

Sales of new bakkies, minibuses and vans, at 11 977 units, inched up 1.6%, while sales of medium trucks, at 493 units, dropped by 3%.

Sales of new heavy truck and bus sales declined by 1.3% to 1 069 units.

New-vehicle exports from South Africa declined by 10.3% to 11 659 units, owing to refurbishment work at a major vehicle plant.

Sales of the Ford Kuga, currently the subject of a safety recall, dropped from 146 units in December to 74 units in January.