The National Automobile Dealers Association (NADA) has welcomed the recent interest rate cut , saying that it would stimulate an appetite for new car sales.
The central bank on Thursday, announced a 25 basis points rate cut, putting the repo rate at 8% , while the prime lending rate has edged down to 11.5%.
NADA said that the domestic car sales market had been subdued, due to the high cost of living.
NADAs Vice Chairperson Thembinkosi Phantsi says, A significant portion of vehicle sales are financed, and now with the lower borrowing costs, consumers are more likely to purchase new vehicles and this provides a stimulus to the auto retail market. It will boost the automotive sector, which is something that weve really been waiting for.
This industry is a very resilient industry, however, the pressures of interest rates, the pressures of high fuel cost, and the pressures of high cost of living really put the sector through a very difficult period, adds Phantsi.
