There is a shock in store for the South African car market in the new year – car prices will be going up by up to six per cent, says Manny de Canha, managing director of Imperial Motor Holdings.
There is a shock in store for the South African car market in the new year – car prices will be going up by up to six per cent, says Manny de Canha, managing director of Imperial Motor Holdings.
Echoing the statements made by Burchmore’s managing director Darryl Jacobson last week, De Canha said the exchange rate was the major cause of the price pressure on importers. He said importers would have to introduce price increases of up to six per cent early in January in order to survive in this competitive area of the South African motor vehicle market.
CARtoday.com last week quoted Jacobson as saying that “the devaluation of the rand during the last three months would make price increases unavoidable”.
However, "the good news is that buying a car nowadays is considerably cheaper than it was four or five years ago when interest rates were in the twenties," De Canha said at the weekend.
Imperial Motor Holdings is South Africa’s largest importer of new passenger vehicles and De Canha, who is generally regarded as an expert in the field of motor importing, further predicted that next year would probably herald further interest rate cuts.
"I think a reduction of 0,5 percentage points will be announced in the new year, and interest rates may be lowered by a further half a percentage point later," he said in reply to a question about whether interest rates in the country had reached an overall low.
Incentives, such as residual values and interest write-backs, also contributed to cars being more affordable than before, news24 quoted De Canha as saying.
As far as the overall motor market in South Africa is concerned, De Canha said sales of 235 000 passenger vehicles were expected this year – an increase of about 9,5 per cent over last year.
"Motor vehicle sales next year will be the same as this year, or rise marginally," he predicted.