THE number of consumers with impaired credit records remains relatively high and the current real disposable income is under pressure showing that consumers are not yet out of the woods.
This emerged as analysts dissected the latest new vehicle sales that the National Association of Automobile Manufactures of South Africa (Naamsa) released on Friday.
Based on the current uncertain domestic and global economic conditions, experts still believe there will be no interest rate hike for the remainder of 2011.
Sydney Soundy, Absa vehicle and asset finance executive, said the number of consumers with impaired credit records remained relatively high at 8,6 million making up 46,4% of the total credit active consumer base.
Soundy said another concern was the debt-to-income ratio which had reached almost 76,85%.
But stable and relatively low interest rate levels have improved debt servicing costs to 6,9%.
He said because many consumers were still highly indebted and found it difficult to obtain credit for higher-priced vehicles, a demand existed for good quality used vehicles.
"Increased transportation costs, including fuel prices and the proposed toll fees in Gauteng, will encourage the shift towards purchases of smaller and fuel-efficient models," he said.
New vehicles sales during August grew by 11,1% to 51436 compared with the same month last year.
Passenger vehicles sales increased by 8% year-on-year to 36197, whereas medium and heavy commercial vehicles and buses had an increase of 16,8% to 2306.
Soundy said they were still adamant that growth in vehicle sales in the 2011 market would be within the bracket of 10 to 12%.
Kgotso Radira, an economist at Investec, said: "We expect the positive growth trend in vehicle sales to continue but at a slightly slower pace due to base effects and slowing economic activity.
"Globally the focus of central banks is on providing support to the slowing economy, despite risks of inflation rising sharply. We expect the South African Reserve Bank to remain extremely cautious, leaving interest rates unchanged for the remainder of the year," Radira said.
Consumers battle debts
THE number of consumers with impaired credit records remains relatively high and the current real disposable income is under pressure showing that consumers are not yet out of the woods.
This emerged as analysts dissected the latest new vehicle sales that the National Association of Automobile Manufactures of South Africa (Naamsa) released on Friday.
Based on the current uncertain domestic and global economic conditions, experts still believe there will be no interest rate hike for the remainder of 2011.
Sydney Soundy, Absa vehicle and asset finance executive, said the number of consumers with impaired credit records remained relatively high at 8,6 million making up 46,4% of the total credit active consumer base.
Soundy said another concern was the debt-to-income ratio which had reached almost 76,85%.
But stable and relatively low interest rate levels have improved debt servicing costs to 6,9%.
He said because many consumers were still highly indebted and found it difficult to obtain credit for higher-priced vehicles, a demand existed for good quality used vehicles.
"Increased transportation costs, including fuel prices and the proposed toll fees in Gauteng, will encourage the shift towards purchases of smaller and fuel-efficient models," he said.
New vehicles sales during August grew by 11,1% to 51436 compared with the same month last year.
Passenger vehicles sales increased by 8% year-on-year to 36197, whereas medium and heavy commercial vehicles and buses had an increase of 16,8% to 2306.
Soundy said they were still adamant that growth in vehicle sales in the 2011 market would be within the bracket of 10 to 12%.
Kgotso Radira, an economist at Investec, said: "We expect the positive growth trend in vehicle sales to continue but at a slightly slower pace due to base effects and slowing economic activity.
"Globally the focus of central banks is on providing support to the slowing economy, despite risks of inflation rising sharply. We expect the South African Reserve Bank to remain extremely cautious, leaving interest rates unchanged for the remainder of the year," Radira said.
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