New car sales have continued to fall in South Africa, according to recently released sales data from Naamsa (the National Association of Automobile Manufacturers of South Africa). A grand total of 54,244 new vehicles have been sold in the last year, meaning an 8.6% drop from last year.
The Big Car Sales Decreases
By far the biggest decreases in car sales have been seen in the government and rental categories (with government sales falling 25.7% and rental sales 23.8%). Analysts say this is due to the unstable economic climate, which means companies are holding on to their money rather than buying new assets.
Dealer Car Sales Hardly Hit
Interestingly though, sales through car dealers, which account for most normal consumer purchases of new cars, have dropped only 2% in the same period. And whilst sales of light commercial vehicles have dropped overall by 4.1%, sales of light commercial vehicles through dealers have actually risen by 1.5%.
Alongside this, applications for financing vehicles have also risen, going up by 7.5% and with a record number of financing applications received in October alone. This may help explain why dealer car sales have not suffered as badly, since consumers do not need to pay full car price immediately, but can instead finance a car to make it more affordable.
However, fewer households now qualify for financing due to lower credit scores, as inflation, interest rates and even cost of living prices are on the rise.
What Does This Mean for You?
Falling car sales may put you in a stronger position to negotiate car prices with dealers, as dealerships look to make profit in any way possible. However, it may also mean less choice for you in the long run, as low sales numbers are sure to mean less cars being manufactured or imported. This could also mean more second hand car sales, as those who need a vehicle but who can’t get financing are more likely to turn to cheaper used car options. This may mean higher resale values on vehicles.
It’s tough to say what the long term consequences of falling car sales will be. But it doesn’t look like this trend will be reversing any time soon, as economic conditions continue to decline.
Main Subject: car
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