{"id":173699,"date":"2017-05-08T12:06:39","date_gmt":"2017-05-08T10:06:39","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=173699"},"modified":"2017-05-08T12:06:39","modified_gmt":"2017-05-08T10:06:39","slug":"new-data-paints-a-scary-picture-for-south-africas-car-industry","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/173699\/new-data-paints-a-scary-picture-for-south-africas-car-industry\/","title":{"rendered":"New data paints a scary picture for South Africa’s car industry"},"content":{"rendered":"

Vehicle finance group WesBank warns that the local car industry should prepare for an uncertain future following the most recent car sale numbers.<\/p>\n

It said that the South African new car market immediately felt the repercussions of the country\u2019s economic downgrade, in April. Total sales plummeted 13.4%, with only 34,956 new vehicles sold \u2013 the lowest sales performance since December 2009.<\/p>\n

All market segments were impact, with passenger and light commercial vehicle sales seeing respective declines of 13.7% and 13.3%, WesBank pointed out.<\/p>\n

Until March, the new vehicle industry saw year-to-date growth of 1.9%, however April\u2019s negative sales performance results in a year-to-date decline of 1.4%.<\/p>\n

Read: South Africans ditch new cars for used models priced under R200,000<\/a><\/strong><\/p>\n

\u201cThis sales performance is not just bad news for the new vehicle industry, but also the country,\u201d said Rudolf Mahoney, head of brand and communications at WesBank.<\/p>\n

\u201cHistorically, the performance of the new vehicle market has served as a leading indicator for economic activity, suggesting that the outlook for year could be worse than initially forecast. One should also factor in that the April decline was compounded by several public holidays.\u201d<\/p>\n

Confidence has been shaken by the news that ratings agencies have given the South African economy a \u201cjunk status\u201d label, Wesbank said. The deteriorating rand has already resulted in a notable fuel price increases and the prospect of negative GDP growth is also likely to result in a cycle of interest rate hikes.<\/p>\n

Consumers who did purchase cars last month reacted sharply to these factors \u2013\u00a0 WesBank\u2019s data shows a 12.6% increase in vehicle finance agreements with fixed interest rates, compared to March, indicating that consumers are hedging the risk of possible future interest rate increases.<\/p>\n

WesBank\u2019s internal data also has further insight into this sudden market reaction.<\/p>\n

Consumer demand for new and used vehicle finance, as measured through the volume of finance applications received, fell sharply over the last month.<\/p>\n

New vehicle finance applications declined 10.7%, while used vehicle finance applications fell 15.3%.<\/p>\n

The average value of a new car financed in April was R296,448 – up from R287,669 a year ago.<\/p>\n

Even though April only had 18 working days there was still a significant decline in market activity, with a 6.4% slump in the daily rate of applications received.<\/p>\n

\u201cThere is no mistaking this behavior as consumers and businesses reacting to the economic downgrade and factors that led to it,\u201d said Mahoney. \u201cThose who are in the car market right now should spend prudently and prepare for an uncertain future.\u201d<\/p>\n

\n

Read: The cost of owning a car in South Africa is about to get a whole lot more expensive<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Vehicle finance group WesBank warns that the local car industry should prepare for an uncertain future, following the most recent car sale numbers.<\/p>\n","protected":false},"author":10,"featured_media":142355,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26,6619],"class_list":["post-173699","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline","tag-wesbank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/173699","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=173699"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/173699\/revisions"}],"predecessor-version":[{"id":173721,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/173699\/revisions\/173721"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/142355"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=173699"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=173699"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=173699"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}