Motoring

Politics played its part in lower vehicles sales in May

Yes, times are tough and the bigger economic picture influences every buying decision we make.

Wesbank reported a decline of 14.2% in the sales of new vehicles during May 2024.

“While the politics will play out during June, the new vehicle market will hopefully be able to display more positivity during the second half of the year,” says Lebo Gaoaketse, head of marketing and communication at WesBank. “The May sales hiatus shouldn’t have been unexpected, albeit a continued display of depression for the new vehicle market.”

Figures released by naamsa | the Automotive Business Council showed the May new vehicle market declined by 6 137 units to 37 105. This depressed result follows the blip of positivity in April (up 2,2% year-on-year), which had followed eight consecutive months of negative growth

“There was a direct correlation between demand as measured by applications for finance and the sales volumes for May,” says Gaoaketse. “Applications for new vehicle finance declined by double digits, while used vehicles maintained stronger interest, showing the weak demand as consumers and businesses waited for elections.”

Contrary to recent trends, light commercial vehicle (LCV) sales declined 19.5% to 10 334 units. The recent trends show that passenger cars, including sedans, hatchbacks, and crossovers, are challenging the light commercial vehicle (LCV) segment in terms of affordability and value-packed options. However, the LCV segment has consistently out-performed passenger cars in the past.

Passenger car volumes were down 11.6% to 24 367 units although the discrepancy and volatility of these segment fluctuations is more balanced in the year-to-date view. With the total market 6% slower for the first five months compared to last year, passenger cars and LCVs are down 6,4% and 6,1% respectively.

Once again, they have maintained interest rates at previous levels. Although the rate remains high, some analyst outlooks indicate that inflation has peaked, which could indicate lower rates during the second half of the year.”

However, a slightly improved fuel price and absence of load-shedding may support some new economic activity.

Gaoaketse concludes, “First half sales will certainly look shaky, but we expect more positivity to enter the market during the second half of the year.”

Source: MotorPress / Wesbank

 

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