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Black men overtook their white counterparts as the leading demographic group of new vehicle buyers earlier this year and are racing ahead, according to the country’s top vehicle financier.

September 6, 2007

By Roy Cokayne

Pretoria – Black men overtook their white counterparts as the leading demographic group of new vehicle buyers earlier this year and are racing ahead, according to the country’s top vehicle financier.

Brian Riley, the chief executive of WesBank, said black men bought more new cars than white men for the first time in January, and they had since increased their leading position.

Black men accounted for 28.2 percent of WesBank’s new business at the end of last month, he said, up from 18.6 percent in the first quarter.

“They represent the fastest-growing customer demographic category in our new business book. They stole market share from everyone else,” Riley said.

“This demonstrates clearly the shift in buying power and how the automotive industry is successfully selling to this influential market.”

The total black market increased its share of WesBank’s new business book for both new and used vehicles from 32 percent in the first quarter to 43 percent at the end of last month.

For new vehicles, this segment increased its share from 30 percent to 40 percent in the same period. It rose from 33.3 percent to 44.2 percent of WesBank’s used vehicle book.

Riley said the average value of finance deals approved for black men had dropped to R119 822 at the end of last month from R124 523 in the first quarter. This may have been due to a sizeable increase in balloon payments in some vehicle finance deals and an increase in used vehicles as a percentage of the new business book of WesBank.

The average value of finance deals approved by the asset finance house of listed banking group FirstRand for the entire black market declined to R121 596 from R122 025.

Riley said this was an indication that there was not such a significant difference between the average value of vehicles acquired by black men and black women, which was not the case for other race groups.

White men, in particular, bought significantly more expensive vehicles than white women, he said.

The comments were made against the backdrop of a recovery in new car sales in August after four months of poor sales. Last month 37 719 units were sold, which represented an increase of more than 17 percent from the 32 199 units sold in July.

Last month’s figure was only 3.8 percent lower than the 39 203 units sold in August last year, which remains the record sales month.

Most commentators attributed the recovery in the market to the off-take of new vehicles by the car rental industry and sales of the new Mercedes-Benz C-Class, which has just been launched.

Riley said the overall new vehicle sales figures showed positive signs, indicating that the industry was starting to overcome teething problems with the National Credit Act and was adapting to its requirements.

“We have found that the time taken to process car finance deals has decreased; it is back in line with what we were experiencing prior to the introduction of the legislation.”