VPI Q1 2019 Results
Overall, the South African car market has had another challenging quarter with low business and consumer confidence. New vehicle sales have deteriorated due to current depressed macro-economic environment which has added pressure on household disposable income. The increases in fuel prices and the added hassle of load shedding hampered business activity which decreased demand.
New Vehicle price increases have slowed down in Q1 2019. The increases have been marginal from Q4 2018 and Q1 2019 showing that manufacturers are reducing new vehicle prices in real terms.
Used vehicle price increases have also slowed down in Q1 2019 as compared Q1 2018. Used price increases have dropped to 1.8% which is well below the average of 2.9% over the previous 3 years. This is indicative of the shift from used to new as the supply of quality used vehicles are diminishing.
“The car industry in general is still in decline, and is taking strain from several quarters right now: an ongoing subdued macro-economic environment, the lag effect of the 2018 interest hike, weaker exchange rates, lower business confidence in the run-up to the elections and constrained household disposable income have all directly impacted vehicle sales. Load-shedding has also played a role, with the number of valuations being done and the volume of footfall through dealerships being clearly affected by power outages. There’s broad consensus that we’ll see a minor recovery in the second half of the year, but the fear is that it won’t be enough to compensate for the first half decline”
– Kriben Reddy, Head of Auto Information Solutions
Q1 2019 Vehicle Asset Finance Results
We have seen no shift in the vehicles finance bands over the last four quarters and we expect this trend to continue into 2019.
VPI Q1 2019: Insights
Unpack the most important facts, findings and insights held in this quarter’s infographic. Download our latest version here.