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Good times over for SA auto market?

2012-11-14 07:14

CAPE TOWN - The relatively good times of 2012 for the local automotive industry are unlikely to continue in 2013, according to TransUnion Auto Information Solutions.

Major dealer groups have seen financial results improve, with new vehicle sales up by 10% compared to 2011, continuing cost control and a decline in debt.

'ALL IS NOT ROSY'

Carel Martin, spokesman for TransUnion, said: "But all is not rosy as dealer confidence levels are decreasing when compared to those seen over the past 18 months.

"There is good reason for this, as consumer debt continues to grow and reports indicate that households are experiencing further strain."

Other factors which could pressure the industry included rising fuel prices, toll fees for Gauteng drivers, and stabilising vehicle sales volumes.

Continued support programmes from manufacturers, coupled with low interest rates, could potentially boost consumer credit demand.

Low price increases for 2012, which contributed to growth, were unlikely to be sustained in 2013 as the Rand weakens and input costs increase.

UNDER PRESSURE

Martin predicted continuing pressure for used car dealers, who were selling used vehicles below the recommended retail price in an attempt to counter price discounts and incentives offered by the new vehicle market.

Gross margins in the used vehicle market appeared to have stabilised after the average percentage gap between trade and retail values reached its lowest level in the past four years.

Martin said: "Given the current market conditions, based on positive trends, constant supply and relative price stability seen in 2012, we can expect 2013 to deliver some growth, although it should be less than what we’ve seen in the past two years."

AP

Comments
  • trevor.bush.9655 - 2012-11-14 18:36

    That is just local market, as for exports, due to the strikes and HUGE increases being given, automotive will for sure be next on the ANC's list...and already to prodcue a car costs MORE in SA than in Europe this year, so expect SA to lose any future export contracts and the running out of current contracts...Automotive in SA is dieing and dieing FAST. Only the ANC's forced policy of you build 90 000units and you get tax breaks on imports is keeping us going but this is dangerous, a false platform which can collapse totally at anytime. Goodluck SA, I'm off to China again, there we are building car plants faster than the ANC can create jobs.

  • KevvyW - 2012-11-14 22:57

    And they tried to convince the SA public that all is well in the industry, just to keep their pricing structure ??? We are not stupid. I actually said a few months ago, our auto market is heading for a "recession". Wake up to your greed. I was this coming longggg time ago...Why counldn't you ? ? Or just wanted to milk the cow some more hey....Oh and another Toy Recall ? ? ?

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