In a statement, naamsa says the medium-term growth outlook remains muted. Fitch Ratings’ decision to affirm the sovereign credit rating at BB- with a stable outlook underscores expectations of GDP growth averaging just 1.2% through 2027, as structural constraints continue to weigh on investment and job creation. For the vehicle market, this points to a demand base that is steady but limited by low potential growth.

Encouragingly for households, consumer inflation slowed to 3.3% y/y in August, below expectations. Lower food, fuel and transport costs have eased pressure on disposable incomes, while subdued vehicle price inflation, supported by a stronger rand and heightened competition, has helped sustain affordability in certain segments. This disinflationary trend offered some relief for car buyers, particularly in the small-car and entry-level categories, where cost sensitivity is highest.

Despite inflation undershooting expectations, the South African Reserve Bank (SARB) held the repo rate at 7% at its September meeting. By prioritising inflation expectations at the lower end of the 3 to 6% range, the SARB has maintained restrictive borrowing costs. While new-vehicle purchases have benefited from the 125 basis points of cuts implemented so far, further easing would be particularly beneficial for households considering higher-value or discretionary vehicle purchases.

Consumer confidence weakened in the third quarter, with the sharpest decline among middle income households, whose sentiment fell owing to weak job creation and rising food costs.

Encouragingly, the index for durable goods purchases edged slightly higher, suggesting that some households remain willing to consider big-ticket items where @nancing is accessible. On the external front, the trade balance remained in surplus at R20.3 billion in July, supported by strong commodity and agricultural exports.

This has helped stabilise the rand and contain imported inflation, indirectly benefiting the auto sector through lower costs of imported components and competitive vehicle pricing. However, rising imports of petroleum products and shifting trade conditions, including US tariff barriers, continue to pose risks for the broader economic environment in which the automotive sector operates.

• New-vehicle sales have been released at the 2025 SA Auto Week, taking place in Gqeberha, Eastern Cape Province, from 01 – 03 October. This year’s gathering is especially momentous as naamsa celebrates its 90th anniversary in the province, which continues to stand as the beating heart of South Africa’s automotive industry.