CAR affordability in Mzansi is set to improve over the next couple of years as local and global economies continue to recover from the Covid-19 pandemic.
The South African Gross Domestic Product continues to take strain, and our inflationary forecast sees two interest rate increases within the next six months, but economists believe the situation in the local economy will begin to improve with decreases in the repo rate and that the economy will normalise in 2024.
CEO of WesBank Ghana Msibi said he expects the supply shortage of certain automotive components such as semiconductors to improve in the medium-term and for the current logistical turmoil in the world to ease, together with lower shipping costs.
These developments will help world economies, including Mzansi, by cutting operating costs.
Msibi said an important development will be when China, with its zero Covid-19 policy and related manufacturing plant shutdowns, starts firing on all cylinders.
This will be a major factor in improving component availability for the entire global automotive industry and its related economies.
“The improving global and local economic situations will be beneficial in improving vehicle affordability, but locally there are calls from consumers and industry commentators for the government to cut duties and taxes to improve affordability. However, the government’s finances are currently so constrained that they will be hard stretched to make these cuts,” he said.
Msibi further said: “I believe what is needed are infrastructural projects that will not only boost the economy but also create jobs and much needed employment. This, in turn, will mean more people paying tax to grow the fiscus.”
There has been a substantial increase in market activity this year compared to last year, evidenced by surprisingly good new car sales figures, and this activity is expected to grow next year to the benefit of consumers.
