The National Association of Automobile Manufacturers of South Africa (Naamsa) reports that vehicle sales for April 2014 are down 10.7%, year-on-year.
Year-to-date sales figures also reflected a decline, dropping to -5.1% when compared to -3.4% for March 2014.
A total of 46 013 vehicles were sold in April, with passenger vehicles accounting for 26 013 of that figure, a year-on-year drop of 9.6%. Light Commercial Vehicle (LCV) sales saw a bigger drop of 11.5%, which contrasts with this segment’s 3.7% growth in March 2014.
The slump in sales is as a result of fewer selling days in April this year, compared to April 2013, but despite this consumer demand remained high.
The main influencing factor for this demand was a recent amendment to the National Credit Act, which allowed certain buyers to reenter the credit market, contributing to a 16.4% surge in finance applications for used cars, year-on-year. New car finance applications increased by 6.7% for the same period.
This falls in line with WesBank’s outlook for the market, which forecasts a shift from new to used vehicles, driven by aggressive increases in new car prices.
In the first quarter of 2014 TransUnion Auto reported an increase in new car prices of 6.58%, versus a 0.83% increase in used car prices.
“The outlook for 2014 remains that the new car market will remain depressed,” said Rudolf Mahoney, head of Research at WesBank.
“There will be significant growth in the used car market.”
The rand’s performance has been volatile in recent months and the short- to medium-term outlook remains relatively uncertain.
The underperformance of the currency will continue to negatively impact on new vehicle sales as a result of aggressive price increases by the manufacturers.