MOTOR INDUSTRY: Rough ride ahead after healthy appetite for new vehicles in Q4 2022

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The macroeconomic storm clouds, which the industry had seen lifting, are likely to hit the market very soon as 2023 is predicted to be a tough year.

The economy might be in reverse, but that didn’t seem to scare off consumer appetites for new wheels or financing – at the end of last year, at least. Q1 of 2023, by all accounts, is going to paint a rather different picture.

TransUnion says the number of financial agreements in the passenger vehicle market in Q4 increased by 1.5% year-on-year, with 13% more new vehicle deals and 3.4% fewer used vehicle deals sealed. Kriben Reddy, vice president of auto information solutions at TransUnion Africa, said the number of financial agreements in the passenger vehicle market in Q4 had increased by 1.5% YoY, but warned that negative GDP growth from Q3 and low consumer confidence suggest that a slowdown in demand is imminent.“Deteriorating credit health is a leading indicator for a challenging trading environment for retailers and lenders.

Meanwhile, Q4 sales data from Naamsa indicate a 16% increase YoY, which is up only 0.1% on Q3, which it says suggests greater economic pressure on the new vehicle market as well as supply chain disruptions.

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