MAYBE NOT: For the first time in 22 months, SA vehicle finance applications saw a year-on-year decline. Image: Shutterstock
The National Association of Automobile Manufacturers of South Africa (Naamsa) has reported that new vehicle sales in April 2015 saw a year-on-year decline of 3.3%.
The total number of passenger car sales totalled 30 184, resulting in a year-on-year decline of 1.9%. Sales of Light Commercial Vehicles (LCV’s) totalled 12 077, a yearly decline of 6%.
Passenger car sales reported the smallest decline among the segments. Passenger sales through the dealer channel have only declined 0.8%, year-on-year.
COMMERCIAL SALES DOWN
However light, medium and heavy commercial vehicle sales through dealer channel declined dramatically compared to the same period in 2014. LCV sales declined 13.6%, followed by declines of 3.5% for medium commercial vehicles whilst the heavier commercial vehicles declined by 5%.
Simphiwe Nghona, executive head of motor division at WesBank said: "The sudden decline in commercial sales is indicative of current business sentiment in the market. Market confidence is low, and the current economic climate is not conducive to growth."
"As a result, corporate buyers are electing to hold onto assets for longer by extending the replacement cycle, and not incur any further debt or capital expenditure on replacing or acquiring business assets."
Fewer working days in April also affected the volume of retail vehicle finance applications. For the first time in 22 months application volumes have seen a year-on-year decline. New vehicle finance applications were down 7.68%. Used vehicle finance applications, which have seen record growth until now, declined 0.32%.
"This seasonal fluctuation was not at all unexpected, with the Easter holidays always seeing fewer people visiting showrooms,” said Nghona. "Application volumes are also starting to normalise now, after the introduction of credit amnesty in March last year."