According to financial services firm Wesbank, year-over-year sales comparisons appear to be starting to show a consistent trend, indicating some form of stability in the new-vehicle market.
August new-vehicle sales were the second best-performing sales month so far in 2022, just as they were this time last year. August recorded 47,420 new vehicle registrations according to Naamsa | the Automotive Business Council, 14.2% more than the same month last year.
“It is interesting to note the correlation of market performance this year compared to 2021,” said Lebogang Gaoaketse, head of marketing and communications at WesBank. “Last year, August was the second best selling month at the time, with March 2021 being the best selling month. Coincidentally, March 2022 sales have been the best month so far. sales this year.
If that could be defined as a trend, the market outlook for the rest of the year could be even brighter, Wesbank said. August 2021 sales were usurped by September and then November volumes last year.
“August sales are also reassuring in the sense that the increase in volume is coming from this relatively high base,” Gaoaketse said. “The face of rising interest rates in July does not appear to have dampened market demand.”
While more interest rate hikes are inevitable this year, demand in the new vehicle market continues to grow. “Finance applications continue to show growing demand for vehicle replacements, with WesBank’s book showing strong double-digit growth driven by new vehicle applications,” he said.
This demand was clearly evident in August sales with mixed successes in the passenger car and light utility vehicle (LCV) sectors. The performance came from consumer demand, with rental sales down 23.7%, while still contributing 3,912 units to overall market volume.
Passenger cars were up 14.6% to 31,269 units from August last year, representing very similar volumes to July. It was LCVs which supplied 13,281 units, up 13.1% year-over-year, that supported the market, a much better performance than last month’s 9,552 sales.
The dealers will have had a smile with their performance up 23.4% and 10.5% respectively for passenger cars and LCVs, specifies the lending establishment. The 40,889 sales made on the showroom floor during the month of August accounted for 86.2% of the market.
“The appeal of the used market appears to be waning, likely due to price inflation and increasingly limited availability of good inventorysaid Gaoaketse. “While the used market offers affordable solutions for cost-conscious consumers, the average used car transaction size has increased by more than 10% year-over-year, while the value financing agreements on new vehicles during the same period is static.
This will fuel the new vehicle market as the replacement cycle is under pressure and motorists need a new mobility solution to combat rising operating costs for older vehicles.
New cars financed amounted to 59,096, compared to used vehicles, 119,061.
Year-to-date, new vehicle sales rose 13.8% to 344,244 units, showing reassuring signs that the market’s recovery is continuing, Wesbank noted.
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