New vehicle sales continue to surprise industry experts

The latest new vehicle sales figures for March released by NAAMSA on the 1^st of April indicate another month of positive growth for the motor industry. Albeit off a low base, new vehicle sales continue to surprise industry experts, highlighting that SA could be seeing the last of the recession.

During the month of March, a total of 28 478 new passenger vehicles were sold, 5125 units or 22% more than March 2009. On a year-to-date basis, the passenger vehicle market is up by a very healthy 23%. Findings from the WesBank book support the increase in activity levels seen during the first three months of 2010, as well as evidence that banks have been able to extend finance somewhat more freely. Comparatively speaking, the number of finance applications WesBank received in the first quarter of 2010 is up by only 16% on 2009, indicating that a higher percentage of applicants are being approved.

WesBank's new-to-used ratio further supports the increase in demand for new vehicles. Its new-to-used ratio, which reached a level of 2.3 used cars for every new car financed in November last year, has now recovered to a more sustainable level of 1.8 used for every new car. This trend back towards favouring new cars can partly be attributed to the increased activity in new model introductions so far in 2010, and will no doubt be driven even further by the unexpected 0.5% rate cut announced by the Monetary Policy Committee in March.

“It has already been an encouraging start to 2010, with total new vehicle sales up 18.70% year-to-date. The announcement by the MPC will certainly accelerate the pace at which consumers are able reduce their debt and improve the overall health of their personal balance sheets, therefore improving their ability to afford new vehicles.”, says Chris de Kock, Executive Head of Sales and Marketing at WesBank.