New vehicle sales have increased by 6.3% year-on-year in September. Photo: Simphiwe Mbokazi

CAPE TOWN - The National Association of Automobile Manufacturers of South Africa has recently released its aggregate sales data showing 6.3% year-on year growth.

According to Head of Communications and Marketing, Rudolf Mahoney, the vehicle manufacturers have been artificially decreasing car prices by giving value back to the consumers-so much that this has led to a decrease on the amount they financed. 

NAAMSA statement indicates that this is due to reduced new vehicle pricing pressures and weaker dollar position. 

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Business Manager at Absa Vehicle and Asset Finance, Daven Coopa alluded, "the effects of the reduction of the interest rates as well as attractive sales incentives and subventions from motor manufacturers in order to move metal".

An economist at Investec, Kamilla Kaplan says, light and medium commercial vehicle sales are likely to remain modest in line with the relatively subdued consumer retail environment. "Heavy commercial vehicle sales should remain restricted by the weak investment climate that in turn reflects the effects of low demand, excess capacity and to an extent, perceived heightened policy uncertainty," Kaplan added.

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With regards to projections for the end of the year, Coopa noted, "whilst we have seen month on month growth in new vehicles sales over the last four months, the trend will remain a function of economic, household and business sector finances and confidence. The economy continues to remain subdued with consumers still under financial strain".