October new vehicle sales at 45 445 units fell 2% from those sold in the same month a year before, the third consecutive month of decline as the rising cost of living and restrictive borrowing costs continues to depress demand for luxury goods.
“South Africa's total vehicle sales, as well as those in the passenger car and light commercial vehicle segments, all declined in October compared to the same month the previous year. However, the declines were generally smaller than the industry had anticipated,” Thembinkosi Pantsi, National Vice-Chairperson of the National Automobile Dealers’ Association (NADA) said yesterday.
There were increased sales in the medium and heavy truck and bus segments, while built-up vehicle exports surged by almost 40%, he said.
“It's quite clear the ongoing buydown trend continues as the Chinese brands gain more momentum, alongside affordable mobility options from other brands. The tough economic conditions, policy uncertainty, and the high cost of living are massive problems. The increase in new car prices on certain brands has also contributed to the drop in October numbers, leading consumers to opt for demo models or pre-owned vehicles,” said Pantsi.
Sales data from Naamsa | The Automotive Business Council, showed yesterday that export sales increased to 40 302 units in October 2023 compared to 28 891 vehicles exported in the same month a year before, when vehicle sales were affected by a Transnet strike.
“Out of total reported industry sales of 45 445 vehicles, an estimated 36 468 units, or 80.2% represented dealer sales, an estimated 12.9% represented sales to the vehicle rental industry, 4.1% to government, and 2.8% to industry corporate fleets,” Naamsa said in a statement.
The October new passenger car market fell by 3.5% to 29 912 units. Car rental sales accounted for 18.3% or 5 468 units of the new car sales.
Domestic sales of new light commercial vehicles, bakkies and mini-buses at 12 361 units recorded a decline of 387 units, or by 3%, from the same month a year before.
“The (new vehicle) market was still 1.3% below the pre-pandemic level in 2022 and for the year to date was now 2.1% units ahead of the corresponding period 2022, on track to recover to the pre-pandemic level of 2019,” Naamsa said.
“The country’s weak economic growth rate, although still marginally positive, remains a key challenge going forward in view of the close correlation between new vehicle sales and the GDP growth rate.”
The vehicle export momentum remained upward for the balance of the year.
In 2022 the US comprised the domestic automotive industry’s 2nd largest export destination with total automotive exports amounting to R24.1 billion.
“Trade arrangements, such as AGOA, substantively secured, strengthened, and enhanced the domestic automotive industry’s exports and trade flows and the extension of AGOA beyond September 2025 and South Africa’s continued eligibility under the Act will be key focus areas,” Naamsa said.
Finance Minister Enoch Godongwana said yesterday that a policy on new energy vehicles would be announced in the 2024 National Budget.
BUSINESS REPORT