It all seems to be catching up now, data released today shows that South Africa’s new vehicle sales fell by 13.8% year on year in November to only 47 707 units. These figures released by the National Association of Automobile Manufacturers of South Africa (Naamsa) also show that sales for the first 11 months of 2007 are 4.3% lower than the same period in 2006. This is a clear sign that consumer are starting to buy fewer cars.

This is really no surprise considering the economic changes they have taken place in South Africa during 2007. The introduction of the NCA (National Credit Act) has made it harder for consumers to obtain credit, and without easy access to credit, one would find it hard to purchase a new vehicle. Not many people are able to purchase a new vehicle in South Africa for cash as it is just too expensive.

The ever increasing interest rates have also hampered the new vehicle sales figures as it has now become expensive to borrow money to finance a new vehicle. One now has to look really closely at how much they would be repaying on a monthly basis to finance the purchase of a new vehicle and currently it may not be affordable to do so with the ever rising interest rates.

Some consumers are also resisting the need to purchase a new vehicle due to the rising fuel prices. It is now costing much more to fill up you tank this year than it was last year. And all of this is adding up to there being a decline in new car sales.

This now asks the question: How are the car manufacturers and car dealers going to continue making money if the consumers as not spending as much as they used to?

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