Fairland, Gauteng -- (SBWIRE) -- 02/25/2013 -- Data from leading asset-based financier, WesBank, reveals that the number of hybrid or ‘green’ cars it is financing for South African consumers is gradually increasing, but remains low as a percentage of total passenger vehicles financed.
However, the company believes the shift to ‘green’ cars will accelerate as factors such as lower purchase prices and running costs, Government incentives, a wider selection of models and raising awareness around environmental issues start to take effect.
The company’s book figures reveal that the number of hybrid cars financed by WesBank for consumers during January to September 2011 has increased by 88%, albeit off a low base, when compared to the same period last year.
According to Cyril Zhungu, General Manager for the Motor Division at WesBank, the uptake in hybrid vehicles is slowly increasing in South Africa, but remains relatively low in comparison to international consumer adoption figures.
According to latest statistics by hybridcars.com, in 2010 hybrid vehicles made up 2.4% (275 000 units) of the US vehicle sales market and in Japan automakers recorded a 21% growth in hybrid and electric vehicle sales during 2010 - growing to more than 486 000 units, up one-third on 2009 levels. In contrast, sales of hybrid vehicles in South Africa make up less than 1% of total passenger vehicle sales.
Unlike a conventional car that is powered by an engine run on petrol or diesel, a hybrid vehicle uses two or more power sources - both a traditional engine powered by petrol or diesel and an electric motor powered by a battery.
“We expect that the effect of factors such as government’s implementation of carbon tax in September last year, on each new car sold, will fuel increased interest in hybrid vehicles among consumers over the next couple of years,” says Zhungu.
“Rising fuel costs is another factor that may stimulate local growth, as hybrid models offer better fuel efficiency than conventional vehicles, while pricing is also less of a disadvantage as hybrid vehicles are gradually becoming cheaper to manufacture as production numbers increase.”
He also points to the increase in the range of hybrid vehicles currently available locally as potential for increased sales activity. “Around five years ago there were only one or two types of hybrid vehicles available in the country. Now more models, across various categories, are available to consumers and major car makers are continually expanding their range of hybrid offerings with new innovations, including greater fuel economy and lower emissions.”
According to research conducted by climateavenue.com, most modern hybrid vehicles can reduce smog-forming pollutants by up to 90% and carbon dioxide emissions by 50%.
The US-Obama administration recently announced plans to deploy one million plug-in hybrid vehicles by 2015. Locally, the SA government is also trying to encourage greener vehicle sales among consumers with its policy to reduce greenhouse gas emissions by 34% by 2020.
People purchase environmentally-friendly cars for a variety of reasons, such as concern about the environment and climate change, image and lower running costs. Local consumers are also becoming increasingly aware of their role in climate change and many are actively looking for ways to address the problem.
“The share of hybrid vehicles in total car sales continues to increase in many countries and South Africa is likely to follow suit as more hybrid models become available on the market,” concludes Zhungu.
About WesBank
WesBank has over 40 years of experience in asset and vehicle finance. As a leading asset-based finance provider in South Africa, we finance new and used vehicles for personal use, both privately and through dealerships, as well as leisure vehicles, and also offer expert advice and professional service to our clients.
Our other main focus is providing quality asset finance and fleet management solutions for a number of market sectors. WesBank’s asset finance services cover aviation finance, agri finance, commercial vehicle finance, company vehicles, plant equipment, office equipment, public sector finance and franchise finance. In addition, we offer personal insurance, vehicle insurance, personal loans as well as business insurance, and we are perfectly placed to structure a finance deal to suit your needs.
WesBank is a division of FirstRand Bank Limited, which in turn, is part of the FirstRand Group. FirstRand is South Africa's most innovative Bank Assurance Group with interests in Retail and Merchant Banking, Life Assurance, Financial Planning and Medical Schemes.