16 March 2017: WesBank, South Africa’s leading vehicle and asset finance provider, has forecast that 2017 will see minor growth in the new vehicle sales industry. The past three years have seen sales decline, with 2016 sales falling a massive 11.4% – based on WesBank’s prediction that sales would tumble 12%. For 2017, WesBank expects to see overall growth of 1.74%.
This year’s forecast was delivered by WesBank CEO Chris de Kock at the 32nd SAGMJ WesBank South African Car Of The Year awards evening, in Midrand, Johannesburg last night. The evening function took place at the new Kyalami racetrack – the same venue where this year’s Car Of The Year testing was conducted – and saw the Opel Astra being crowned as the winner. Audi’s A4 and Volkswagen’s Passat were the first and second runners-up, respectively.
WesBank’s forecast is based on a holistic view of the new vehicle sales market. This includes considering economic factors such as the strength of the Rand, interest rate stability and moderate GDP growth and inflation falling back within the target zone.
While total industry sales should reach 557 000 units for the year – a 1.74% increase on 2016’s sales and marginal growth off a much lower base – de Kock forecasts that dealer sales would remain suppressed, especially in passenger and commercial vehicle segments. Dealer sales are expected to end 2017 0.5% weaker year-on-year, with 2% and 4.1% respective declines for passenger and commercial vehicle sales through dealers.
“We expect overall sales growth to be driven by government buying, as there are a number of large tenders set to be awarded in the coming months. This will account for 3.29% growth in LCV sales and help limit the sales decline for commerce vehicles,” said de Kock. “Additionally, tourism will drive the sales growth in the rental market, which will ensure 1.3% growth for passenger car sales.”
Despite a difficult past 12 months and a challenging year ahead, WesBank is confident that South Africa’s economy will see positive but subdued growth going into 2018. Inflation is expected to settle down within the upper part of the Reserve Bank’s target band, which will result in the current repo rate remaining stable at 7%. The Rand has recovered from its lows in 2016, aided by political and economic policies in global markets, and should hold its ground through to 2018