Centurion, Monday, 02 September 2019: The new vehicle sales figures released by the National Association of Automobiles Manufacturers in South Africa (NAAMSA) are 45 537 for the month of August, a welcomed 1 900 month-on-month improvement in units sold in July. However, the results showed a decrease of 5,1% compared to August 2018’s 47 977 units, which is a reflection of the overall decline in new vehicle sales. According to Iemas Financial Services CEO, Banie van Vollenhoven, “During the first eight+ months of this year, the vehicle sales industry was under a lot of pressure due to uncertainty surrounding various economic factors which influenced consumer behaviour and indeed financial decision-making”.
Macro economic changes that we experienced recently include Fitch’s Ratings’ credit rating downgrade to negative and the increased unemployment rate of 29% – both unfavourable to the consumer’s credit appetite. On the upside, the interest rate decrease of 25 basis points (decline from 10.25% to 10,0%) and the minor petrol price reduction (although expected to hike again in September) will have a nominal, though positive impact on vehicle sales for the remainder of the year.
However, the vehicle industry should not get too excited as consumer debt-levels are still high with the debt-to-income ratio at 72.7%. As such, consumers are expected to be more conservative in their spending in the coming months therefore the local vehicle industry and related businesses, have to look at new and innovative ways to adapt to inconsistent consumer behaviour and industry trends. Being able to create solutions that better suits their pockets and expectations is critical.
Unlike traditional banks that have customers, the Iemas co-operative has members who become part of the business when they take up any of the products on offer. Members of the co-operative have a say in the management of the business as well as a share in the profit through an annual reward payout. These are allocated at the end of the financial year via direct credits and through a special reserve fund on which the member earns, currently 6.5% interest. These exclusive member benefits are aimed at rewarding loyalty.
Iemas Financial Services is a co-operative that offers a wide range of affordable and competitive financial products and services to over 160,000 members across South Africa.
About Iemas Financial Services (Co-operative) Limited
Iemas Financial Services is a co-operative that offers a wide range of affordable and competitive financial products and services to over 160,000 members across South Africa.
At the heart of Iemas’ co-operative business model is the principle that the organisation is owned by, and operated for the benefit of those using its services (referred to as its members), and Iemas members annually share in the profits of the organisation based on the products/services they use during the year.
Iemas has co-operation agreements with over 600 employers authorising the co-operative to offer its financial products and services to their employees.
With a history spanning over 80 years, Iemas has extensive experience in providing financial services and its product portfolio includes: Vehicle financing | Comprehensive insurance solutions | Educational loans | Secured and unsecured loans | a Purchase card | Housing solutions/mortgages.
Insurance products are offered through Iemas’ subsidiary Iemas Insurance Brokers (Pty) Ltd. Iemas Financial Services (Co-operative) Limited is a registered credit provider (NCRCP 1332) and Iemas Insurance Brokers (Pty) Limited is an authorised financial services provider (FSP 47563).
More blog articles on financial education:
- Iemas offers affordable financing solutions to assist matric graduates in building a bright future
- Iemas Financial Services looks at the impact of low or negative economic growth and how to cope financially during these trying economic times
- How the Co-operative business models advances financial inclusion in SA