- Comments on NAAMSA New Vehicle Sales Report – October 2014
- Nicholas Nkosi – Head of Standard Bank Vehicle and Asset Finance – Personal Markets
“Despite a poor economic outlook, new car sales continue to show resilience driven by 1.6% growth year on year in passenger vehicles sales. This is driven by new model launches, incentive packages and pre-emptive buy to avoid car price increases. Despite the new car sales growth, an increasing number of buyers continue to seek value in the used car market, which has also seen a positive growth of 8.1% month on month.”
General Comments on October 2014 NAAMSA sales:
- The month of October 2014 experienced a 2.36% decrease in sales compared to September 2014.
- Month on Month Passenger vehicles declined by 5.24% while Light Commercial Vehicles increased by 4.42%.
- Year on Year monthly comparison shows an increase of 4.90% in October 2014 compared to October 2013.
- Year to date (January – October 2014) comparisons shows that vehicle sales are down by 1.83% in the first 10 months of the year when compared to last year.
- Month on month Exports increased in October 2014 (4.49%) with Passenger vehicles decreasing by -5.95% and Light Commercial Vehicles growing by 22.17%.
- Year on year monthly comparison shows an improvement in exports of 32.97% in October 2014 compared to October 2013.
- AMH & AAD decreased in October 2014, 6.44% month on month.
General Comments on October 2014 Standard Bank VAF Personal Applications:
- In October 2014 applications for both new and used vehicles experienced positive month on month growth, 7.1% and 8.0% respectively.
- Applications in both Passenger (8.1%) and Light Commercial vehicles (5.7%) had positive month on month growth in October 2014.
- The number of applications with RV’s increased by 12.4% month on month while the number of applications with deposits increased by 3.4% month on month.
- The Average Contract Term on applications increased from 67 months to 69 months (October 2013 to October 2014), year on year growth of 3.0%.
- The average application size increased from R189 818 in October 2013 to R211 704 in October 2014, a 11.5% year on year increase.
General Comments on October 2014 Standard Bank VAF Personal New Business:
- In October 2014 new business experienced positive month on month growth in both new (25.5%) and used (22.1%) vehicle markets.
- Passenger vehicles and Light Commercial vehicles both had positive month on month growth, 28.6% and 24.6% respectively.
- New business deals with deposits increased month on month by 10.0% and declined by 25.5% year on year.
- New business deals with RVs increased month on month by 37.9% and 43.9% year on year.
- The Average Contract Term increased from 65 months in October 2013 to 67 months in October 2014 (3.4% year on year growth).
- The average deal size increased from R262 100 in October 2013 to R307 465 in October 2014, a 17.3% year on year increase.
General Macro and Industry Comments:
- The SARB left the repo rate unchanged at 5.75% following its September MPC meeting. The outcome was in line with the industry’s forecast. According to Standard Bank this was based on the SARB’s revised forecasts for headline inflation.
- Headline CPI annual inflation rate in September 2014 was 5.9%. This rate was 0.5 of a percentage point lower than the corresponding annual rate of 6.4% in August 2014.
- The transport index decreased by 1.5% between August 2014 and September 2014. The annual rate decreased to 6.9% in September 2014 from 7.1% in August 2014.
- SARB’s growth was revised lower, from 1.7%, 2.9% and 3.2% y/y in 2014, 2015 and 2016 respectively to 1.5%, 2.8% and 3.1%. Standard Bank expects GDP for 2015 and 2016 to continue to disappoint to the downside. The SARB has lowered its growth forecast for 2014 successively at each of the last six meetings (starting from 3.3% at the September 2013 meeting).
- Year to date petrol prices have dropped by 2.8% (inland) and diesel by 7.9% (inland).
- The price of Petrol will drop by 45 cents per litre from the 5th of November 2014 while the price of diesel will go down between 60 and 61 cents per litre.