The unblocking of the bottleneck caused by April's eNatis fiasco resulted in May's car sales surging 21,5percent. But car sales were down 10percent from May last year, showing fewer people can afford new cars at the current interest rate, which will probably be increased on Thursday.
Last month a trend of businesses investing in delivery vans and other commercial vehicle continued while families postponed buying new cars. The motor industry had sold 51684 vehicles last month, 1,7percent less than May last year, the National Association of Automobile Manufacturers in South Africa said yesterday.
Friday's introduction of the National Credit Act was likely to boost this month's car sales, Standard Bank economist Danelee van Dyk said . The act makes new cars more affordable by easing restrictions on private leasing.
"No deposit will be required and finance will be awarded purely according to the individual's debt portfolio and whether additional repayments will remain affordable," van Dyk said.
Toyota South Africa chief executive Johan van Zyl said: "There is a lot more caution evident in the market now as the cost of motoring comes under pressure not just from higher interest rates, but also higher fuel prices. Buyers are reviewing their position not just with regard to the current cost of finance but also in the light of future increases and are reluctant to commit to purchases."