Car sales could double in SA within the next four years if Government prioritised and fast-tracked proposed amendments to the law pertaining to the leasing of vehicles, the RMI says.
Car sales could double in South Africa within the next four years if Government prioritised and sped up proposed amendments to the law pertaining to the leasing of vehicles - instead of dealing with the issue as part of a broad consumer credit law review, the RMI (Retail Motor Industry organisation) said on Tuesday.
According to , the RMI was pressing government to gazette an amendment to consumer laws to allow the private leasing of vehicles.
CARtoday.com reported yesterday that the department of trade and industry had given its informal backing to a vehicle-financing arrangement that would allow for private leasing. However, government would prefer not to deal with the private leasing issue in isolation, instead it would deal with it as part of a wider review of consumer credit law, the newspaper said.
But it might take some time for the changes to pass through Parliament, whereas the gazetting of specific measures to allow private leasing could be undertaken far faster, RMI chief executive Jeff Osborne said.
"The existing law could be amended simply, with an end to the current requirement that you need a 10 per cent deposit when making a purchase, and a further change to abolish the current maximum number of 54 repayments," Osborne added.
"We will be seeking a meeting with government to press for this faster approach to be taken," he concluded.
But aren’t car prices the biggest barrier to affordability?
The introduction of private leading has been put forward as an attractive way of stimulating demand as it has done in both the UK and the US in recent years. But there has also been concern among consumers that while car prices rose strongly in 2002, when the rand weakened, there had been no significant price cuts in 2003 as the value of the rand remained on a strong level.
McCarthy Motor Holdings chairman Brand Pretorius recently said the issue of extending ownership to many who currently cannot afford vehicles was a top priority for the automotive industry.
Average white South African families took 69 weeks to fund a new car, while typical US families had to work 19 weeks. Moreover, an average household in South Africa has to work for 208 weeks to fund the purchase of an average vehicle.
"Compared to the disposable income of all South Africans, cars are expensive," Pretorius said. "In Australia they have half our population, but their car market is three times the size of SA's."
He said that with 380 vehicles per 1 000 white South Africans, the most affluent population group in this country had a similar vehicle ownership profile to that in much of Europe.
However, vehicle ownership among black consumers is just 30 cars per 1 000, Pretorius added.