New vehicle sales in May recorded their biggest growth since July 2022 – when the market grew 30.9% – as the market was still reopening after the pandemic, and performance was skewed as a result. According to data from naamsa | the Automotive Business Council, May’s new vehicle market registered 45,308 sales against the 37,139 retailed in the same month last year.
This year’s May stats are compared with May 2024, during which elections occurred, meaning most, if not all, South Africans were too busy voting to visit the showroom floors. Therefore, the clear improvement in this year’s May is accounted for by why it’s better. “May 2024 sales were depressed and down 14.2% compared to May 2023, providing particularly relevant context to this year’s performance.”
Data from naamsa and the Automotive Business Council show that May’s new vehicle market registered 45,308 sales against the 37,139 retailed in the same month last year. “While volumes continue to be confidence-inspiring, South African household budgets remain under pressure,” says Gaoaketse. “The market’s expected slow recovery is continuing to play catch-up, but the industry should remain vigilant and continue to drive innovative reasons to attract consumer and business decisions to purchase new vehicles.” The disapproval of a national VAT increase eased many household budgets; however, fuel levies are still a constant.
WesBank stated that the momentum of new vehicle sales will undoubtedly receive an additional boost from the announcement last week by the South African Reserve Bank to lower interest rates by 0.25%. It is crucial to note that the majority of WesBank finance agreements are linked to the prime lending rate, providing significant relief for customers from this month. However, the pressure of overall affordability remains, given that the average finance amount across the bank’s new vehicle book has decreased by 8.6%.
May’s passenger car segment drove market growth, up 30% to 31,741 units. While consumer sales off dealer showroom floors accounted for 87.5% of those sales, the rental market virtually doubled its volume from May last year. Light Commercial Vehicles grew 5.8% to 10,938 units. With eight consecutive months of growth, May new vehicle sales put any doubt of revitalized growth to rest, recording an impressive 22% growth in market activity year-on-year.