Squeezed consumers see new vehicle sales drop
JOHANNESBURG - Data from the National Association of Automobile Manufacturers of South Africa (Naamsa) showed that pressure was mounting on the new-vehicles sector due to consumers’ depressed disposable income and the weaker rand. Naamsa said new vehicle sales dropped 3.1percent year-on-year to 47718 units in March.
Mike Mabasa, executive director of Naamsa, said prospects for domestic new vehicle sales, particularly the new car market, would continue to be affected by the depressed macro-economic environment and pressure on household disposable income.
“Higher food, fuel and electricity prices, a weaker exchange rate against all major currencies, and load shedding continued to dampen already low levels of business and consumer confidence during March 2019, weighing on demand,” Mabasa said. Consumer spending is set to come under further pressure this month with a surge in fuel prices expected to kick in tomorrow and other levies announced in the Budget.
Ghana Msibi, WesBank’s executive head of motor, said the weakening rand and the shadow of possible ratings agency downgrades didn’t help March's new vehicle sales, as consumer and business confidence continued to come under pressure. “Household budgets also continue to take strain as a result, directly impacting demand for new vehicles, as motorists continue to hold on to their vehicles for longer,” Msibi said. “While sobering, the market picture is not all doom and gloom, nor unexpected. We forecast first-half sales to be slow, with a better-performing second half.”