By Otsile Kadiege

South Africa’s new vehicle sales this year have been declining for months on end when compared with last year’s statistics. NAAMSA | The Automotive Business Council said that the welcomed uptick in the July 2024 aggregate new vehicle sales figures could be the turning point for an improved second half of the year performance.

New vehicle sales snapshot

Aggregate domestic new vehicle sales in July 2024, at 44,229 units, reflected an increase of 657 units, or a gain of 1,5%, from the 43,572 vehicles sold in July 2023. Export sales, however, decreased by 12,671 units, or 33,2%, to 25,461 units in July 2024 compared to the 38,132 vehicles exported in July 2023. Overall, out of the total reported industry sales of 44,229 vehicles, an estimated 35,853 units, or 81,1%, represented dealer sales, an estimated 13,5% represented sales to the vehicle rental industry, 2,9% to government, and 2,5% to industry corporate fleets.

New passenger vehicles sales

The July 2024 new passenger car market at 29,934 units had registered an increase of 1,894 cars, or a gain of 6,8%, compared to the 28,040 new cars sold in July 2023. Car rental sales accounted for a sound 17,1% of new passenger vehicles sales during the month. Domestic sales of new light commercial vehicles, bakkies and mini-buses at 11,554 units during July 2024 had recorded a decrease of 1,112 units, or a loss of 8,8%, from the 12,666 light commercial vehicles sold during July 2023. 

New commercial vehicles sales

Sales for medium and heavy truck segments of the industry performed weaker in July 2024 and at 641 units and 2,100 units, respectively, recorded a decrease of 45 units, or 6,6% from the 686 units sold in July 2023 in the case of medium commercial vehicles, and, in the case of heavy trucks and buses a decrease of 80 vehicles, or 3,7%, compared to the 2,180 units sold in the corresponding month last year. 

The July 2024 exports sales at 25,461 units reflected a decrease of 12,671 vehicles, or a loss of 33,2%, compared to the 38,132 vehicles exported in July 2023. For the year to date, vehicle exports were now 13,5% below the corresponding period 2023.

In anticipation of improved economic prospects during the second half of the year, the new vehicle market responded positively during July 2024. Increased seasonal sales to the rental industry contributed to the higher sales during the month. Although aggregate new vehicle sales for the year to date remained 6,3% below the corresponding period 2023 and despite various challenges and elements of economic uncertainty, OEMs and importers continue to launch new products into the marketplace. Encouraging aspects for growth and increased consumer spending for the balance of the year include four consecutive months of no loadshedding, a stronger Rand exchange rate, and potentially up to two interest rate cuts before year-end. Positively, the ABSA Purchasing Managers’ Index tracking expected business conditions in six months’ time increased to 69.4 points in July 2024 from 68.1 in June 2024. This is the most optimistic respondents have been about business conditions going forward since early 2022.

Significant decline in vehicle exports

Vehicle exports reflected a substantial decrease during the month compared to the correspondingly high monthly base level 2023. Adverse weather conditions during the month as well as declining exports to Europe, the domestic automotive industry’s top export region contributed to the weaker performance for the year to date. The Eurozone GDP grew by only 0,3% during the second quarter 2024 with Germany’s GDP contracting by 0,1%. The direction and performance of vehicle exports for the balance of 2024 will remain linked to central banks’ gradual monetary easing in major markets.