The South African new vehicle market has yet to benefit from improving economic sentiment in the country, with September seeing a modest year-on-year decline.
Figures released by Naamsa - The Automotive Business Council - show that 44,081 new vehicles were sold in September, a 4.1% decrease versus the same month last year.
This decline was driven by light commercial vehicles and bakkies, whose September total of 10,914 units was a 17.1% year-on-year drop. The passenger car market grew by 2%, fuelled by sold demand from the rental car industry, which accounted for 28% of sales.
Overall vehicle sales for the first nine months of 2024 are 5.8% lower than the equivalent period in 2023, Naamsa said, but the industry association is expecting the market to take a positive turn before the end of this year as easing inflation brings relief to household budgets.
“As the country anticipates further interest rate reductions, the costs of borrowing are expected to decline, which may stimulate economic activity, even though immediate improvements in vehicle affordability may be limited,” Naamsa said.
Brandon Cohen, Chairperson of the National Automobile Dealers Association (NADA) said the small increase in passenger car sales offered hope that the market may be slowly turning.
"Passenger car sales are a key indicator of consumer sentiment, and the positive growth in this segment for the second consecutive month is encouraging,” Cohen said.
“While the Reserve Bank’s first interest rate cut in four years will take time to fully impact the market, we are already seeing other positive factors, including a stronger exchange rate, lower inflation, a positive 100-day performance by the Government of National Unity, increased foreign investment, 190 days without load shedding, and lower fuel prices. These are all promising signs.”
Yet despite these green shoots the economic environment remains challenging, Cohen added, as rising electricity prices could put pressure on disposable income.
However the industry remains cautiously optimistic about the new vehicle market going into the final quarter of the year, with demand expected to be driven by new model introductions, aggressive dealer incentives and additional brands in the lower price segments.
On the manufacturer sales front there were no surprises at the top of the charts, with Toyota enjoying a dominant lead with 10,890 sales, followed by Volkswagen (5,885) and Suzuki Auto (5,023). However, GWM made a solid gain, jumping to seventh place, from ninth in August, while Isuzu and Chery both slipped down the board by one place. GWM saw strong demand for its new Jolion and recently expanded P-Series line-up. Stay tuned to IOL later on Tuesday for the Top 50 vehicle sales list.
TOP 15 Manufacturer Sales: September 2024
- 1. Toyota - 10,890
- 2. Volkswagen Group SA - 5,885
- 3. Suzuki Auto 5,023
- 4. Hyundai - 2,841
- 5. Ford Motor Co - 2,823
- 6. Isuzu Motors 1,960
- 7. GWM SA - 1,740
- 8. Chery Auto - 1,614
- 9. Renault - 1,426
- 10. Nissan- 1,425
- 11. Kia SA - 1,284
- 12. Mahindra - 1,014
- 13. BMW Group - 961
- 14. Mercedes-Benz 535
- 15. Omoda & Jaecoo - 506
IOL Motoring