The National Association of Automobile Manufacturers of SA (Naamsa) have now revealed bothering new statistics showing a 14.3% decline in new car sales compared to September 2015.
Respectively, the annual decline in new car sales is an alarming 11.3% at the moment.
In total, only 47 399 new cars were sold last month. Naamsa have attributed this decline to the ever-rising cost of living, causing consumers to tighten their budget more and more.
This news is especially worrying if you remember that September is the end of the quarter, and usually sees loads of special offer to help dealers reach their targets.
“This sales decline remains in line with WesBank’s view of the market, which is influenced by a number of macroeconomic factors,” says Simphiwe Nghona, CEO of the Motor Retail at WesBank. “Additionally, consumer budgets are under more pressure than ever which has made it more difficult for them to either afford a new car or justify buying in the new market.”
But, where the new car industry falls, the used car market is picking up, with an annual increase of 6.7% year-on-year. This growth in the market is encouraging used car dealers to hike prices. This is reflected in the average value of a used car sold; R191 236, which is an increase of 8.7% over this time last year.
On the other side of the spectrum, average new car prices have also increased; up 18% to R293 343, which obviously further discourages buyers from new cars.
“History has shown that the performance of the new vehicle market is cyclical, and we are nearing the bottom of this cycle. However, in the medium term the future of the market will be determined by the verdict from the international ratings agencies,” said Nghona. “A downgrade in the country’s debt rating will have a number of far-reaching consequences that will have direct and indirect impacts on vehicle prices and consumer budgets.”