JOHANNESBURG, South Africa – Sales of new vehicles in South Africa through July, according to finance house WesBank, may have shown a clearer sign of market activity as lockdown regulations ease and the economy begins to recover.
WesBank warned, however, that it was too early to define a trend or level of normality as the complexities and many unknowns of the developing pandemic might be in the wings.
The National Association of Automobile Manufacturers of South Africa (Naamsa) has reported that July sales of new vehicles declined by 29.6% to 32 396 if compared to July 2019. ”This shows some levels of improvement in the context of June sales which, at 31 867, were 30.7% down year-on-year.”
Lebogang Gaoaketse, WesBank’s head of marketing and communicatios, told The Corner in a media release: “We had begun to see an uptake on fixed-rate deals in June thanks to low interest rates so it’s interesting to note the significant change in the bank’s average deal duration in July.”
WesBank data, he explained, indicated a July shift towards earlier settlements of deals. “We might have considered a result of people making affordability decisions in terms of monthly instalments except that the bank’s average deal size is between 10% and 15% higher year-on-year across new and used.
“We will require more data before we can fully understand how buyers’ behaviour is changing.”
‘HARD-HIT’ LOCAL ECONOMY
He added that indebted buyers benefited from another interest cut in July as the Reserve Bank attempted to stimulate the economy and bring some relief against investment returns but households were also faced by higher fuel prices.
Consumer price inflation came in at 2.2% although the overall food basket increased 4.2% and many food groups exceeded this amount.
Gaoaketse added: “This all continues to paint a picture of a hard-hit economy that will take some time to recover.”
WesBank does, however, see improvement as the CoVid pandemic eases.