Lamborghini

The latest sales figures from vehicle industry body the National Association of Automobile Manufacturers of South Africa (NAAMSA) have revealed a welcome increase in vehicle sales during the month of April.

 

The figures show that sales of passenger vehicles increased 36% from 26 283 in April 2009 to 35 763 in the same month this year. Importantly, sales of passenger vehicles in the domestic market were significantly up, meaning that South Africans are starting to spend on big ticket items again.

 

This presents a golden opportunity for brokers to grow their client base, as the purchase of these items by consumers inevitably requires a review of their insurance position. It also offers brokers a chance to look for better deals for their existing clients.

 

The flurry of vehicle sales activity means it is crucial for brokers stay on top of their game with regards to the available offerings in the short-term motor insurance sector. It is also an opportune time to start doing some serious networking again.

 

Over the last few years, some brokers have allowed the relationships they had formed with car dealerships to lapse as a result of the slowdown in sales. It is vital that these are re-established. Dealerships are a vital source of new business referrals, providing a steady stream of potential clients and policies.

 

It will not be easy however. Many dealerships now have in-house insurance forces, so independent brokers who don’t put in the effort should not expect these potential new clients to come their way.

 

This increase in car sales and the consequent upturn in demand for motor insurance policies also bodes well for the wider insurance industry. Motor insurance makes up about 60% of the total personal lines business in South Africa and an increase in demand for car insurance is often seen as a good barometer for establishing the prospects for the rest of the short-term insurance industry.

 

Another positive sign is that the increase in vehicle sales has not been restricted to any particular make or market segment. In the middle market segment, brands such as Volkswagen increased sales by 40% in April to 5,389 from 3,843 in the same period a year earlier, and despite its recent woes, sales of Toyota vehicles rose 10% to 3,080 on the same period.

 

There have also been positive signs in the luxury car market. BMW Group  recorded a 40% increase in sales to 1,877. Sales of Audi’s rose 59% in April to 319 against 200 a year earlier, sales of Mercedes-Benz rose 35% to 1,816, while sales of Toyota Lexus models doubled to 26 against 13 in 2009.

 

Five Mazerati’s and two Lamborghini’s were also sold in April, closing an encouraging month for the high-end car industry.

 

At MUA, where one of our main areas of speciality is insuring executive, luxury and exotic vehicles, we have experienced a surge in new clients coming on board. In April alone, we recorded an approximate 20% increase in new business quotation requests, due largely to the upturn in demand for new luxury vehicles.

 

This upturn is in contrast to the last few years where insurance policies in the industry as a whole remained fairly static as the economy struggled through the recession and even the higher earners were reluctant to buy new vehicles

 

The rise in vehicle sales is great news for the insurance industry and for brokers in particular, but with so many avenues through which one can purchase insurance now, it is crucial that broker’s ensure they are prepared for this upturn in demand and are ready to guide their clients to new, innovative and value-added insurance products that best suit their needs.