Wesbank anticipates positive vehicle sales in 2015
Despite an apparent slow start to new vehicle sales in January, WesBank anticipates industry growth this year. The latest new vehicle sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa) reflects a small decline in vehicle sales, compared to January last year.
Industry new vehicle sales totalled 52 306 units for the first month of 2015, a year-on-year decline of 1.2%. Of this, passenger cars accounted for 36 982, down 3.6%, while Light Commercial Vehicles increased 6% to 13 460 sales.
A closer examination reveals that the decline in sales of new vehicles can largely be attributed to a 9.7% drop in activity in the rental market.
“Rental companies seem to be shifting their replacement cycle to the second half of the year – as we saw in the last six months of 2014,” said Rudolf Mahoney, head of research at WesBank. “Sales in the rental market were down 11% at the start of 2014, but ended the year with double-digit growth.”
At a dealer level the drop is a mere 0.1%, year-on-year.
“In December 2014 dealer sales increased by 10.5%, suggesting that consumers brought forward their vehicle purchases to avoid January’s annual car price increases,” said Mahoney.
WesBank’s Mobility Index indicates that the monthly mobility costs for consumers are lower now than at the same point in 2014. The Mobility Index tracks all of the associated costs for owning and operating a car, including instalments, fuel, maintenance, and insurance. Compared to August 2014 consumers are now paying R3.99 less, per litre, which equates to a saving of more than 28%
“With interest rates remaining stable and manufacturer marketing incentives helping to drive sales the environment is conducive for marginal growth in the new vehicle market,” said Mahoney. “However, consumers would do well to not budget against savings at the pumps. Should the rand weaken or oil prices increase monthly household budgets will be under even more stress.”