By Malusi Msomi

The encouraging performance in South Africa’s new vehicle market during April 2024 was short-lived as national election uncertainties caused a significant slowdown in May. According to naamsa | The Automotive Business Council, May 2024 sales fell to 37,105 units, a 14.2% drop from May 2023’s 43,242 units. Export sales also decreased by 19.1%, falling to 24,235 units from 29,947 in May 2023.

Dealer sales accounted for 89.4% of the 37,105 total industry sales, with the vehicle rental industry representing 4.5%, industry corporate fleets 3.1%, and government 3.0%. The new passenger car market saw a decline of 11.7% to 24,367 units, while domestic sales of new light commercial vehicles dropped by 19.5% to 10,334 units.

Medium and heavy truck segments showed weak performance, with medium commercial vehicles at 533 units (a 7.3% decrease) and heavy trucks and buses at 1,871 units (a 17.1% decrease). Export sales were also down by 19.1%, with 24,235 units sold compared to 29,947 in May 2023. For the first five months of 2024, exports were 11.6% below the same period in 2023.

Election jitters and an additional public holiday in May caused consumers to hold off on big-ticket purchases like vehicles. However, the second consecutive month without loadshedding and relatively low oil prices supported the manufacturing industry.

Vehicle exports remained weak due to the slow global economic recovery. However, benign inflation rates in the US could lead to easing interest rates later in the year, potentially prompting other central banks to cut rates, which would support South African vehicle exports.