Passenger vehicles, particularly affordable ones, are likely to be the main drivers of vehicle sales growth in 2012, Absa said on Tuesday (03/07/2012).
It was reacting to vehicle sales figures published earlier in the day.
Sales in June were 3.26 percent higher than in May.
"The impact of the tsunami [in Japan] a year ago on stock availability is seen in stronger than expected year-on-year growth,” bank spokesman Wessel Steffens said in a statement.
This was expected to moderate in the second half to anticipated levels.
Applications for vehicle finance increased slightly in June, with approval rates remaining stable.
Consumers were addressing affordability constraints by lengthening the finance period, and by requesting residual values or balloon payments.
The number of applications for used vehicles showed a small decline, while those for new vehicles increased slightly.
In June, 14 percent of applications were received with a request for residual values, compared to 13 percent in May.
Two thirds of applicants asked for a finance term of less than 60 months.
Vehicle price inflation, household income growth, interest rates and access to credit would all affect affordability perceptions.
"A longer replacement cycle for new vehicles is being experienced which will be exacerbated should increasing numbers of balloon payments/residuals be allowed on 72-month terms of finance,” he said.
Real disposable income had grown 4.7 percent in the fourth quarter of 2011, compared to 3.9 percent in the third quarter.
Headline consumer price inflation had declined to 5.7 percent on a year-on-year basis in May, from 6.3 percent in January.
May’s inflation rate had been positively affected by lower food price inflation.
The value of household credit increased by 7.5 percent year-on-year in May 2012, compared to 7.2 percent in April.
Household instalment sales growth accelerated to 17.6 percent year-on-year in May, from 16.6 percent in the previous month.
The ratio of household debt to disposable income remained at 74.7 percent. Households’ debt service cost was unchanged at 6.7 percent for the first quarter, which was consistent with stable interest rates.
In total, 46.2 percent or 8.93 million of the 19.34 million credit active consumers had impaired credit records by the end of 2011.
Vehicle price inflation had remained under control in the first quarter.
New vehicle prices increased by 3.5 percent year on year, down from 3.9 percent in the fourth quarter of 2011. Used vehicle prices rose by 2.3 percent.
Exchange rate movements remained a key factor in vehicle price inflation.
"Given that many consumers are still highly indebted and finding it difficult to obtain credit for higher priced vehicles, demand for good quality used vehicles remain an important factor in the industry,” said Steffens.
Vehicle exports had been negatively impacted by Europe’s economic weakness, with diminishing orders. - Sapa