The latest WesBank Vehicle Sales Confidence Indicator shows that the market appears to have stabilised at an activity level of 4.7 percent for the third quarter.

This was the same as the previous quarter, the company said on Wednesday.

"Dealers are more upbeat about the outlook for the next six months and suggest that the confidence levels may reach 6.2 in the first half of 2009."

The main factors that contributed to the more positive outlook included stabilising interest rates and lower fuel prices.

"Furthermore, it would appear that this sentiment is being driven by the fact that dealers noted July as the bottom of the cycle and anticipated the market to start improving," WesBank said.

However, it pointed out that overall confidence would be influenced by several factors.

"From a household debt to disposable income perspective, consumers need to start paying off short term debt in order to increase their affordability levels and to service their current debt."

Stable or even lower interest rates in 2009 and the subsequent decreases in the fuel price would help drive confidence levels and provide much relief for consumers.

From an economic perspective, there were a number of risk factors that would influence the future outlook.

"The higher rand dollar exchange rate seen in the past few weeks will have a knock-on effect as imports will become more expensive, likely increasing new vehicle prices."

WesBank added that a plethora of consumer and economic factors continued to affect the local market. The current global climate remained an important consideration for the market outlook as the end of 2008 drew closer.

Sapa

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