Slight increase in new vehicle sales a good indicator of stronger economy
The slight YoY increase in new vehicle sales is a good indicator of a stronger economy, although consumer confidence will have to grow dramatically before the industry is wholly out of the woods, says Jeff Osborne of Gumtree South Africa. “While the increase is heartening, it is coming off an extremely low base. This is the first time in fourteen months that new vehicle sales have shown an increase, following a slump.”
The growth can be attributed to a slight improvement in South Africa’s economic outlook, as well as global economic growth indicators and a stronger rand. However, with the current global political state of affairs, anything can happen to upset the market. “It’s safe to say that times are uncertain, so we are unlikely to see annual growth exceeding 3.5-4% this year. Great deals from manufacturers and relatively stable labor conditions will ensure slow but steady growth, and that is exactly what we need at this stage.”
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Secondhand vehicle sales continue to climb steadily. “2016 was a used car year, and as the range, quality and pricing of secondhand vehicles continue to attract buyers, we don’t expect a decline any time soon. Dealerships are becoming savvier at finding leads online and are insisting on a return on investment when they partner with sales platforms, and it will reflect in sales for this year.”
“The ratio of used to new has grown from 1:1 to 3:1, and with the shrinking new car sales, there is a growing shortage of good used stock. This is where Gumtree has the benefit of a strong mix of dealer and private stock,” concludes Osborne.
Via: Gumtree South Africa