S/African used car sales gain momentum

While new car sales in November 2014, dropped by 2.5 percent compared with the same period last year, South Africa’s major banks are reporting an increase in used car sales.

During the period under review, new business experienced positive month-on-month growth of 4.7 percent in the used vehicle market, according to the head of Standard Bank’s vehicle and asset finance division, Nicholas Nkosi.

Figures released by NAAMSA showed new passenger car sales decline by 2.5 percent compared with the same period last year. However, industry sales in all segments increased by 9 percent, it reported showing a marginal improvement.

Passenger vehicles continue to show strain as evidenced by the latest figures. This is anticipated to continue through 2015, according to Standard Bank’s vehicle and finance divisional head.

Head of research at Wesbank, Rudolph Mahoney, said the main reason for the 9 percent increase was that sales of light commercial vehicles increased by 10.8 percent.

He stated that the market has now grown consecutively for three months, which is quite positive, because it started the first half of the year in the negative.Mahoney said there had been a significant increase in applications for finance for used cars at Wesbank. He attributed this to the increase in new car prices due to the weak rand.

Nedbank’s economic unit predicted only modest vehicles sales for 2015.

“The outlook for vehicle sales into 2015 remains modest due to weak economic growth, fragile confidence, still high inflation and weak household finances,” it said in a statement.