The increase in new vehicle sales may still be boosted by low interest rates in 2013, Standard Bank said on Monday.
"Vehicle sales volumes may still be boosted [as]... the prime interest rate remains at its lowest for over three decades, and continues to play a major part maintaining the South African consumer's appetite for debt," said Standard Bank vehicle asset finance head Sydney Soundy.
The National Association of Automobile Manufacturers of SA (Naamsa) reported on Monday that the number of new vehicles sold in June increased 3.3 percent to 53,562.
Sales of new vehicle exports in June declined 10.6 percent to 24,203 compared to the same month last year
Soundy said another factor affecting vehicle sales was that vehicle price inflation (VPI) for the first quarter of 2013 remained below the consumer price inflation (CPI).
"However, the rand has been under pressure against all major currencies, and this will have a negative knock-on effect on VPI," he said.
Soundy said the VPI for the first quarter of 2013 was 2.4 percent, up from 2.2 percent in the fourth quarter of 2012.
He said manufacturers' marketing and incentive programmes would continue to positively spur vehicle sales.
Naamsa said that of the total reported industry sales of 53,562 vehicles, 45,467 units or 84.9 percent, represented dealer sales, while eight percent represented sales to the vehicle rental industry.
About 4.5 percent of new vehicles were sold to industry corporate fleets and 2.6 percent to the government.
Sales of new light commercial vehicles, bakkies, and minibuses increased 2.3 percent to 13,729 units in June, compared to the same month last year.
In the medium truck segment, sales increased 20.5 percent to 1040 units year-on-year, while heavy truck segment sales rose 3.8 percent to 1736.
Naamsa said the industry remained on target for new vehicle export growth of around 15 percent, in volume terms, for 2013.
"As was indicated previously, the outlook for the automotive sector for the balance of the year looks less promising than at the beginning of 2013," it said.
Expectations of subdued gross domestic product, above inflation vehicle price increases, and the April 2013 increase in carbon emission tax on new cars would make the trading environment difficult.
However, the lower interest rate environment should continue to lend some support to the domestic market.
"Other positive factors include replacement demand, the highly competitive trading environment, ongoing attractive incentives, and high technology new model introductions."
Over the next four months replacement demand by car rental companies was expected to also contribute positively, Naamsa said.
Rates could boost car sales: Bank
The increase in new vehicle sales may still be boosted by low interest rates in 2013, Standard Bank said on Monday.
"Vehicle sales volumes may still be boosted [as]... the prime interest rate remains at its lowest for over three decades, and continues to play a major part maintaining the South African consumer's appetite for debt," said Standard Bank vehicle asset finance head Sydney Soundy.
The National Association of Automobile Manufacturers of SA (Naamsa) reported on Monday that the number of new vehicles sold in June increased 3.3 percent to 53,562.
Sales of new vehicle exports in June declined 10.6 percent to 24,203 compared to the same month last year
Soundy said another factor affecting vehicle sales was that vehicle price inflation (VPI) for the first quarter of 2013 remained below the consumer price inflation (CPI).
"However, the rand has been under pressure against all major currencies, and this will have a negative knock-on effect on VPI," he said.
Soundy said the VPI for the first quarter of 2013 was 2.4 percent, up from 2.2 percent in the fourth quarter of 2012.
He said manufacturers' marketing and incentive programmes would continue to positively spur vehicle sales.
Naamsa said that of the total reported industry sales of 53,562 vehicles, 45,467 units or 84.9 percent, represented dealer sales, while eight percent represented sales to the vehicle rental industry.
About 4.5 percent of new vehicles were sold to industry corporate fleets and 2.6 percent to the government.
Sales of new light commercial vehicles, bakkies, and minibuses increased 2.3 percent to 13,729 units in June, compared to the same month last year.
In the medium truck segment, sales increased 20.5 percent to 1040 units year-on-year, while heavy truck segment sales rose 3.8 percent to 1736.
Naamsa said the industry remained on target for new vehicle export growth of around 15 percent, in volume terms, for 2013.
"As was indicated previously, the outlook for the automotive sector for the balance of the year looks less promising than at the beginning of 2013," it said.
Expectations of subdued gross domestic product, above inflation vehicle price increases, and the April 2013 increase in carbon emission tax on new cars would make the trading environment difficult.
However, the lower interest rate environment should continue to lend some support to the domestic market.
"Other positive factors include replacement demand, the highly competitive trading environment, ongoing attractive incentives, and high technology new model introductions."
Over the next four months replacement demand by car rental companies was expected to also contribute positively, Naamsa said.
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