Western Cape Business News

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MARKETING: Surprising Upswing In Vehicle Sales


Recent Western Cape Business News

Vehicle sales took another welcome but somewhat surprisingly large swing upwards last month, with an increase of almost 37% in the overall market over sales in August 2009,” commented the CEO of McCarthy, Brand Pretorius.

Of course one must remember that August last year represented a low point in a year that saw a very depressed new vehicle market, but the strong performance a year later bodes well for a better than expected second half of 2010.

The improvement of almost 50% in car sales was surprising as a number of popular models were in short supply due to the eight day strike at the vehicle manufacturers, while one would have thought that the current strike action would have put a dampener on business confidence. This does not seem to be the case and year-to-date car sales are up an encouraging 31,4%.

However, one must remember that the market peaked in 2006 and many companies that bought vehicles in that boom year now have to replace their fleets. This is undoubtedly, the main reason for the sales upswing. In addition, we had many buyers – particularly private motorists – making their purchases before the imposition of the carbon tax on 1 September.

Brand Pretorius added that the South African public seems to be reducing its debt levels slowly but surely which is having a favourable impact on the rate of loan application approvals by financial institutions. This trend is leading to a gradual improvement in new vehicle sales to private customers.

Last month was also good for commercial vehicle sales – particularly in the heavy truck and bus market, which showed an increase of 47,6% in sales over August 2009. Light commercials were only 8,8% up on sales a year ago, but year-to-date there is 13,8% growth. Medium trucks were up 8,7%, but are virtually static on a year-to-date basis,” said the McCarthy CEO.

It is difficult making a prediction for the coming months in view of the strike in the tyre and rubber, vehicle components and motor retail sectors, but one can only hope that the relative buoyancy in the market continues,” concluded Pretorius.

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