South Africa’s new vehicle industry is forecast to grow just under one per cent in 2018, according to WesBank, the country’s leading vehicle finance provider. WesBank CEO Chris de Kock delivered the Bank’s view of the market and new vehicle sales forecast at the 2018 SAGMJ Car of the Year banquet in Midrand, Gauteng, last night.
“While the recent positive sentiments about South Africa’s economy will impact the automotive industry, this will take time to generate material growth. However, new vehicle sales are expected to see moderate growth this year” said Chris de Kock, CEO, WesBank. “The economic challenges faced in SA are structural in nature, and will take an extended period of time to correct. The positive sentiment brought about by the recent political changes is a good place to start and we are confident that this will lead to greater economic invest and improved growth prospects for the country.”
Dealer sales account for 80% of total sales in SA and are a key indicator of the total market outlook. WesBank expects a modest increase of 3% in the dealer segment, driven mainly by passenger cars sales. This growth will be influenced not only by the improved sentiment, but also a reduction in interest rates and a stronger rand that impacts positively on vehicle price inflation.
The rental market which accounts for 13% of total sales saw unusually high growth in 2017 – this will be tough to match during the coming year. Additionally, the ongoing drought in the Western Cape continues to take a toll on the rental market’s growth prospects with the Western Cape province accounting for 40% of South Africa’s tourism rental market. In these challenging conditions, WesBank anticipates a 14.9% decline in rental sales this year.