In light of the economy, people have a gloomy outlook on spending and more often, not sure about what the future will look like.
However there is a silver lining in the heavy cloud of uncertainty. South Africans are buying cars. The month of June rounded up with a total sales of 45 369 industry vehicles and this shows a year on year growth of 0.9%, even with the decline of 1.7% that saw the first half of 2017.
June’s positive sales growth was driven by consumer activity in the dealer channel, where sales of passenger vehicles and light commercial vehicles (LCVs) grew 4.3% and 5.7%, respectively. Demand for light commercials also grew 74.8% through the government channel and 25.7% in the rental channel, amounting to industry sales growth of 8% for LCVs.
“Growth in the dealer channel was clearly fueled by aggressive marketing in the form of sales incentives and end-of-quarter deals,” said Rudolf Mahoney, Head of Brand and Communications at WesBank.
Consumers in the new vehicle market are also spending more than ever. In June, the average price for a new vehicle was R300 181 – breaking the R300 000 mark for the first time ever. At the same time, consumers are also extending all options to aid affordability. Average contract periods have risen to 70.07 months and demand for balloon payments has seen them being included in 30% of all finance contracts – the highest figure since the inception of the National Credit Act.
Despite the growth in new vehicle sales, there is angst among consumers in an uncertain economy. The demand for fixed interest rates has risen 26% since March this year, with 63.4% of all contracts now using fixed rates.
This probably sounds like a lot of info to process, so here’s a pic just to break it down for us the twitter generation
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