SA car sales hit 10-year high despite rising costs

THE South African new vehicle market is booming, with sales having hit a 10-year high in September, and with that, there has also been a surge in vehicle finance applications, with this number having grown by 65% over the past decade.

- JASON WOOSEY

SOUTH Africans are now spending 16% of their household income on vehicle finance. | NADA

Yet while these are all positive economic indicators, amid growing business confidence in the economy, a somewhat disturbing trend is brewing in the background.

According to ABSA, monthly vehicle instalments now consume 16.1% of the average household income in South Africa, up from 14.3%.

These insights were shared at the recent SA Auto Week, hosted by Naamsa, where the finance institution expressed concern that vehicle prices continue to outpace income growth in South Africa.

This is despite an increasing array of imported brands from China and India, offering high-value products that undercut the established manufacturers.