Car sale confidence drops

Vehicle sales confidence indicator, compiled by auto financier Wesbank, dropped to 5.1 points in the first quarter from 5.4 points in the fourth quarter of 2007, it showed on Wednesday.

The indicator, which polled 500 vehicle sales staff, finance and insurance people, measures confidence on a scale of 1-10 with the highest score indicating an upbeat market and the lowest score indicating a subdued market.

“Given the rate hike and fuel increase, the South African vehicle sales market has fallen on tough times. With the bleak economic picture that is being painted by many commentators, the positive future outlook of dealers may be misplaced,” Wesbank said.

In the medium term, Wesbank said the respondents’ expected the market to pick up slightly with the indicator reading rising to 5.2 in the next three months before climbing to 6.1 by this time next year.

“This seems optimistic given predictions that, even without the current proposals on electricity pricing not taken into considerations, CPIX is only expected to return to the target levels in the last quarter of 2009,” Wesbank said.