The South African new vehicle market is in for a rough ride in 2020, with pressure on businesses, individuals and the economy in general and little hope of recovery. This is the view of WesBank, South Africa’s largest vehicle and asset financier. The bank recently published its annual market predictions and called a market that will be down by 3.5% in this calendar year.
Speaking at the Cars.co.za Consumer Awards, WesBank’s CEO, Chris de Kock, said that the bank expects the market to shrink by over 18 000 sales and that both consumer and corporate buying will decline. The only highlight, says De Kock, is that the export of fully built-up vehicles is set to grow further, helping to sustain the local vehicle manufacturers and propping up a generally weak market.
Of the sub-segments of the vehicle market, the LCV market seems the hardest hit. WesBank expects the sale of light commercial vehicles to decline from 153 189 in 2019 to 146 000 vehicles this year, a decline of 4.7%.
Passenger vehicle sales, which include the better performing SUV market segments, are expected to decline from 355 384 units in 2019 to 345 000 units this year (-2.9%), and medium, heavy and extra-heavy commercial vehicles are expected to drop from 28 053 to 27 000 vehicles this year (-3.4%).
Overall, WesBank expects the market to reach only 518 000 sales in 2020, which is significantly lower than 536 626 vehicles sold in 2019. It will also be the sixth year in seven that the market has declined.
In mirroring WesBank’s view, Toyota SA Motors announced at its recent industry event that it expects the market to decline by 4% in 2020. The largest decline, according to the company, will be in the passenger car market, with the light commercial market showing only a moderate decline.
According to Toyota, the market will be particularly weak in the first three quarters of the year, with only a small improvement towards the end of the year. This will, however, not be enough to stem the general decline in the market.
While the reason for any market decline is multi-faceted, WesBank has mentioned a number of contributing factors that have been found to negatively affect the buying confidence of its customers.
Among the contributing factors, WesBank lists the current poor state of electricity supply, political uncertainty, low market growth, depressed business and consumer confidence and high levels of customer indebtedness.
