New-car prices should, on average, increase between 8% and 11% this year, compared with 3% last year, predicts Combined Motor Holdings (CMH) group CEO Jebb McIntosh.

He says that some importers have already upped the price tags on their cars by 14% since January.

McIntosh says importers are most likely pro-tecting themselves against the weak rand, which has dropped sharply against the major currencies over the last year, increasing the price of imported goods.

Apart from these price increases, possible interest rate hikes of 2% over the next 18 months may also result in a flat new-car market in 2014 over last year.

The buying trend, starting in 2011, remains towards more-affordable cars, with the luxury market “holding up remarkably well”, says McIntosh.

Finance approval rates within CMH has stabil-ised at around 40%, he adds.

CMH sold 19 945 new vehicles through its retail network in the 2014 financial year, ended February 28, compared with 19 793 in the 2013 financial year.

McIntosh says CMH opened six new dealer-ships, including two for Nissan and one for Mahindra, and closed seven, including Peugeot and Citroën, in this period.

CMH sold 13 970 used vehicles in the 2014 financial year, compared with 13 472 units in the 2013 financial year, an increase of 4% despite a roughly 5% decline in used car sales in South Africa, says McIntosh.

Less positive is the news on the MG passen-ger car and Maxus commercial brands, dis-tributed by CMH in South Africa, and owned by SAIC Motor in China.

McIntosh says CMH has been disappointed with the brands’ performance in the local market.

New models, promised for 2013, have not yet been delivered, he notes.

CMH also requires price-competitive models to achieve brand recognition in South Africa. However, a deal with the UK, where the MG brand originates, ensures all right-hand-drive models will be launched there first, and at stand-ards this country requires, which has delayed model introduction, while also increasing costs.

“There is no point hitting our head against the wall – we need good pricing,” says McIntosh. “Management is assessing its options regarding the future of this venture, particularly in light of the recent currency deterioration.”

However, he emphasises that no decision has yet been taken on the future of the MG or Maxus brands within CMH.

McIntosh says the group remains keen on importing vehicles from the East, but that it will most likely be commercial vehicles in future and not passenger cars.