VPI Q4 2018 Results
Overall, the South African car market has had another challenging quarter although 2018 ended with a positive outlook. The signs for new vehicle sales are looking progressive going into 2019 with the GDP growth rate turning around in Q3, positive exchange rate swing from Q3 to Q4, fuel prices decreasing significantly and CPI remaining consistent. We are expecting new vehicle sales to have a challenging 2019 with flat to marginal growth. The used car market although could potentially have more growth if quality used stock is available in 2019. The significant drop in fuel prices have definitely come to the aid of the South African consumer, which could reinvigorate car sales.
In 2018, we have had modest vehicle price increases below CPI, which attempted to stimulate vehicle sales. Total new vehicle sales has declined YoY by 1% with low GDP growth rates, significant depreciation of the rand, record high fuel prices and the first VAT increase since 1994.
“There are only so many levers manufacturers can use to stimulate market demand, including pricing, marketing incentives, trade-in assistance and tools such as residual value that can ease the pressure on consumers’ cash flow. However, measures such as residual value can add up over time and push consumers out of the buying cycle. At a dealer level, there are indications that the market is swinging toward used vehicles, which tend to have a larger margin than new vehicle sales. After-sales service is also a potential growth area for dealers and can ease the pressure from lower sales while the market recovers.”
– Kriben Reddy, Head of Auto Information Solutions
Q4 2018 Vehicle Asset Finance Results
We have seen a shift in the vehicles financed under R200k in 2018 as vehicles financed over 300k have been on average 5% higher in 2018 vs 2017. The results have been consistent over the last 3 quarters.
VPI Q4 2018: Insights
Unpack the most important facts, findings and insights held in this quarter’s infographic. Download our latest version here.
Stay on top of recent vehicle pricing trends with our latest press release. TransUnion’s Q4 2018 Vehicle Pricing Index Indicates an Advantageous Market for New Vehicle Purchasers in South Africa