2 March 2015: February’s total new vehicle sales have grown 1.1%, year-on-year, according to the newest data from the National Association of Automobile Manufacturers of South Africa.
Passenger car sales are up 1.5%, year-on-year, with the segment selling 34 909 cars in total. Light Commercial Vehicle (LCV) sales are up 1.8%, at 15 139 units, however growth in this segment has slowed compared to performance in previous months.
The marginal increase in sales can be attributed to a continued appetite for credit. WesBank’s data shows that vehicle finance applications are up 12.7%, year-on-year. Of this, new vehicle finance applications saw growth of 7.6% compared to February last year. However, the bulk of growth in credit applications are for used vehicles, which saw growth of 15.3%.
“Affordability still remains key for new vehicle sales and buyers either buying down, or considering their options in the used market,” said Rudolf Mahoney, head of research at WesBank.
WesBank’s data shows that sales of entry-level vehicles have grown substantially over the last 12 months. In February 2014, A-segment (entry level) vehicles accounted for 22% of total passenger vehicle sales, while in February 2015 the same segment accounted for 30% of sales.
Buyers’ budgets will continue to be under pressure from March, onwards. Fuel prices are set to increase at least 17% over the next two months, with a 96c/litre increase for 93 octane (at the reef), and an additional 80.5c/litre fuel levy being added to the price in April.
“The upcoming increases in the fuel price represent a big percentage of motorists’ monthly mobility costs, and consequently directly impacts their monthly budget,” said Mahoney. “Should oil prices continue to normalise, and the rand fails to improve, higher mobility costs will continue to put more onus on affordability.”
WesBank is acknowledged as the leader in Vehicle and Asset Finance with over 40 years’ experience and R115 billion in assets currently under management. WesBank focuses on providing secured finance to both the retail and corporate markets, as well as related services such as insurance, fleet management and full maintenance rental. WesBank is the partner of choice for over 60 leading international brands in fields such as original equipment manufacturers (OEMs), insurance providers and oil companies. WesBank is a global company with successful operations throughout Africa as well as the UK.