“New car sales for the month of November 2014 show a marginal improvement of 0.9% year on year. Passenger vehicles continue to show strain as evidenced by the latest figures. This is anticipated to continue through 2015”
[Nicholas Nkosi – Head of Standard Bank Vehicle and Asset Finance – Personal Markets]
General Comments on November 2014 NAAMSA sales:
- The month of November 2014 experienced a 13.95% decrease in sales compared to October 2014.
- Month on Month Passenger vehicles declined by 18.16% while Light Commercial Vehicles declined by 4.73%.
- Year on Year monthly comparison shows a marginal improvement increase of 0.92% in November 2014 compared to November 2013.
- Year to date (January – November 2014) comparisons shows that vehicle sales are down by 1.60% in the first 11 months of the year when compared to last year.
- Month on month Exports decreased in November 2014 by 12.89%. Passenger vehicles for exports increased by 3.79% while Light Commercial Vehicles decreased by 33.97%.
- Year on year monthly comparison shows an improvement in exports of 9.88% in November 2014 compared to November 2013.
- AMH & AAD decreased in November 2014, 11.95% month on month.
General Comments on November 2014 Standard Bank VAF Personal Applications:
- In November 2014 applications for both new and used vehicles experienced negative month on month growth, 1.1% and 3.9% respectively.
- Applications in both Passenger (2.5%) and Light Commercial vehicles (4.0%) had negative month on month growth in November 2014.
- The number of applications with RV’s increased by 1.8% month on month while the number of applications with deposits decreased by 3.2% month on month.
- The Average Contract Term on applications increased from 67.0 months to 69.2 months (November 2013 to November 2014), year on year growth of 3.3%.
- The average application size increased from R194 139 in November 2013 to R215 301 in November 2014, a 10.9% year on year increase.
General Comments on November 2014 Standard Bank VAF Personal New Business:
- In November 2014 new business experienced positive month on month growth of 4.7% in the used vehicle market. In contrast new vehicle market declined by 1.5% month on month.
- Passenger vehicles and Light Commercial vehicles both had positive month on month growth, 2.9% and 0.8% respectively.
- New business deals with deposits decreased month on month by 3.3% and declined by 16.7% year on year.
- New business deals with RVs increased month on month by 12.3% and 79.3% year on year.
- The Average Contract Term increased from 65.3 months in November 2013 to 67.9 months in November 2014 (4.0% year on year growth).
- The average deal size increased from R265 228 in November 2013 to R309 301 in November 2014, a 16.6% year on year increase.
General Macro and Industry Comments:
- Real GDP growth for Q3:14 grew at 1.4% y/y and 1.4% q/q, up from revised rates of 1.3% y/y and 0.5% q/q in Q2:14. This was in line with consensus of 1.4% y/y, and 1.5% q/q. Average growth for the first three quarters of 2014 is 1.5% y/y.
- The SARB left the repo rate unchanged at 5.75% following its November MPC meeting. The outcome was in line with the industry’s forecast.
- Headline CPI annual inflation rate in October 2014 was 5.9%. This rate was the same as the corresponding annual rate of 5.9% in September 2014. On average, prices increased by 0.2% between September 2014 and October 2014.
- The transport index increased by 0.3% between September 2014 and October 2014. The annual rate increased to 4.8% in October 2014 from 4.2% in September 2014.
- Headline inflation is expected to reach a low of 5.1% y/y in Q2:15, and average 5.3% in 2015, and 5.5% in 2016, down from 5.7% and 5.8% respectively at the previous meeting of the MPC.
- Inflation expectations for 2014 fell slightly, from 6.2% to 6.1%, which requires an average inflation rate of 5.9% in November and December. It will be difficult to justify a rate hike in 2015, as these inflation forecasts begin to materialise, unless Fed normalisation causes a significant depreciation of the rand, on a trade weighted basis, such that inflation expectations rise.
- The retail price of 95 grade petrol will drop by 69 cents per litre from the 3rd of December 2014 while the price of diesel (0.05 percent sulphur) would decrease by 53.50 cents a litre, and that of diesel (0.005 percent sulphur) by 54.30 cents a litre.
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