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Rental market killing SA car sales

2015-04-02 11:24

RENTAL INDUSTRY CRASH: SA's vehicle rental industry was down 58% negating the growth seen elsewhere in the industry. Image: Shutterstock

JOHANNESBURG, Gauteng - Vehicle sales in South Africa experienced virtually no growth through March 2015, according to data from the National Association of Automobile Manufacturers of South Africa.

Total sales, at 55 449, were nine more than in March 2014, according to an analysis by WesBank.

Cars contributed 35 548 units to this total but were down 3% year-on-year. Light commercial vehicles' March figure was 16 808, up 5.5% year-on-year but, WesBank reported, industry numbers were countered by actual consumer demand, pushing dealer sales to grow 1.2% for cars and 8.3% for LCVs, year-on-year.


Simphiwe Nghona, executive head of the motor division at WesBank, told Wheels24: "While industry sales for cars were down, dealer channel sales remained strong. It's an indicator that consumer demand is holding steady and buyers are still visiting showrooms.

"The rental industry was down 58% compared to March 2014. That negated the growth seen elsewhere in the industry."

WesBank's data reflects consumer demand with a 20% growth in vehicle finance applications over March 2014. New vehicle finance applications grew by 15% and demand for used-car finance increased 22%.

OEM trade-in  incentives have continued to attract buyers to the new market. This, WesBank said, was reflected in the used:new car ratio, which was 1.4:1 in February 2015 and shifted, in favour of new vehicles, to 1.29:1, in March.

This increase in marketing incentives was attributed to the end-of-quarter sales drive.

Nghona  explained: "With enticing trade-in offers, buyers are also opting to bring forward their replacement cycles."

Vehicle sales, he added, remained in line with WesBank's view of the market: 0.87% for the year.


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