South Africa’s new vehicle market continued to decline this past month‚ with total industry sales of only 42‚907 new vehicles sold – a 10.3% fall.

Within this‚ respective drops of 12.9% and 5.3% were seen for passenger cars and light commercial vehicles‚ Wesbank said in a statement.

WesBank’s own data shows that consumer demand for credit remains robust‚ with new vehicle sales applications down by only 0.2% in May. However‚ the continued shift to the used market is evident.

“Demand for used cars – as measured by application volumes – grew 9.5% in May. These supply demand dynamics have subsequently seen used car prices increase and in May the average transaction value for a used car financed through WesBank grew by 7%.”

WesBank’s forecast for 2016 sees total industry new vehicle sales declining 12% for the year.

This will be fuelled by the weaker rand which has resulted in continued new car price inflation‚ changes to the interest rate and higher living costs faced by consumers. This year the interest rate has been hiked by 75 basis points‚ while petrol and diesel prices have risen 7% and 12%‚ respectively.

“In the current market consumers will find themselves either having to hold onto their cars for longer‚ before replacing them with a new model‚ or taking their budget to the used market‚” said Simphiwe Nghona‚ CEO of WesBank Motor Retail. “This focus on affordability highlights the pressure on consumer budgets. The cost of motoring is on the rise‚ and will start playing a bigger role going forward.”