Ronnie Watson, chief executive of WesBank, believes that car rental companies will procure fewer fleet vehicles this year due to the slowdown in the global economy. The upshot of this, Watson says, is that manufacturers would offer better deals for new car buyers going into the festive season.
Ronnie Watson, chief executive of WesBank, believes that car rental companies will procure fewer fleet vehicles this year due to the slowdown in the global economy. The upshot of this, Watson says, is that manufacturers would offer better deals for new car buyers going into the festive season.
Watson said last week that car rental companies could reduce the number of vehicles they bought because the slowdown would have an adverse effect on tourism. He said better deals for consumers would follow because manufacturers could not "keep cars on rubber", Business Report reported on Wednesday.
Chris de Kock, the general manager of research and development at WesBank, said a buying up trend was prevalent in the new car market and the small executive car market had grown by 20 per cent between 1998 and this year. He added that the small and medium car market had shrunk in this period, with small cars comprising 12 per cent less of the market and medium cars 18 per cent less.
"All cars have become more affordable in credit terms since 1998 because of interest rate reductions,” De Kock said.
"Small cars, which now cost anything up to R70 000, are 10,5 per cent more affordable, medium cars are seven per cent more affordable, but small executive cars, which cost between R170 000 and R250 000, are 20 per cent more affordable in credit terms now than in 1998."
De Kock said there were many indications that the average consumer was moving up the price range, while imported cars had become more fashionable.
“The general trends in a declining interest rate environment were an overall increase in car sales, more people buying new cars rather than used cars, more expensive cars being bought, fewer cash sales and more credit sales. But there was a time lag before all this happened,” De Kock was quoted as saying.
Watson said there was talk of a further interest rate cut in November this year, or in the first quarter of next year, which would be positive for the car market. However, he reduced his earlier forecast, of 250 000 car sales this year to 240 000 units, largely because of the depreciation of the rand.
