New Vehicle Sales Continue To Decline

South Africas domestic new vehicle sales continued to decline although there was a slight uptick in exports in June, according to The Automotive Business Councils (Naamsa) latest data, released on Monday.

Naamsa said the ongoing downward slope in the new market since August 2023 underscores the constrained economic environment, amplified by weak consumer and business demand.

Aggregate domestic new vehicle sales in June, at 40 072 units, reflected a further substantial decrease of 6531 units, or a loss of 14%, from the 46 603 vehicles sold in June 2023.

New vehicle sales further declined in June as South African households continued to grapple with consistent cost pressures in a weak economic environment with affordability remaining a decisive factor in new vehicle purchasing decisions, Naamsa said.

Export sales recorded a 3.6% increase of 977 units, which were up from 27 329 to 28 306 units. However, for the first half of 2024 exports remained 9.6% below the corresponding period in 2023.

Overall, out of the total reported industry sales of 40 072 vehicles, an estimated 33 039 units, or 82.5%, represented dealer sales, 11% represented sales to the vehicle rental industry, while 3.6% were sold to government, and 2.9% to industry corporate fleets.

The new passenger car market registered a 9% decrease of 2671 cars to 26 928 units. Car rental sales accounted for 14.2% of new passenger vehicle sales during the month.

Domestic sales of new light commercial vehicles, bakkies and minibuses dipped 24.3% to 10 552 units. Sales of medium and heavy truck segments of the industry also performed weaker at 531 units and 2061 units, respectively, a decrease of 203 units, or 27.7% from the 734 units sold in June 2023.

Cumulative new vehicle sales for the first six months of the year were now tracking 7.6% below the corresponding period in 2023, in line with industry expectations of a taxing first half of the year, said Naamsa.

However, Naamsa noted that the markets seem to have responded positively to the announcement of the new cabinet. It added that a third month of no load-shedding, a further fuel price cut in July, and likely interest rate cuts before year-end, signalled brighter economic prospects for the second half of the year.

Vehicle exports showed a welcome uptick during the month after losing some momentum since the start of the year. The European Central Bank decided to lower its interest rates by 25 basis points in June, from a record high, which will go a long way to support vehicle exports to the domestic automotive industrys top export region for the balance of the year, Naamsa said.