"This has been a most welcome surprise for the industry," says Brandon Cohen, Chairperson of the National Automobile Dealers Association (NADA), following the release of statistics for January 2025 by naamsa, The Automotive Business Council.

“The passenger car market was even more bullish, with an impressive gain of 18.3% compared to January 2024. This positive trend builds on the momentum from the last quarter of last year, with the rental industry once again playing a major role, accounting for 14.8% of the total market and 19.1% of the car market. The cherry on top was the 29.7% increase in the export of built-up vehicles, which are the lifeblood of several local manufacturers," Brandon adds.

Naamsa, in turn, expressed optimism that the positive momentum of the fourth quarter of 2024 would continue into the first month of 2025. “We are absolutely confident that an improved economic outlook, coupled with higher business and consumer sentiment, will support the new vehicle market in 2025.

“Aggregate domestic new vehicle sales in January 2025, at 46 398 units, reflected an increase of 4 375 units, or a gain of 10.4%, from the 42 023 vehicles sold in January 2024. Export sales increased by 5 803 units, or 29.7%, to 25 348 units in January 2025 compared to the 19 545 vehicles exported in January 2024,” says Mikel Mabasa, naamsa CEO.

The NADA Chairperson, also cautioned about economic headwinds.

"Although we are obviously delighted at the strong performance of the overall market, particularly in the passenger car segment and the recent small decline in interest rates, several challenges remain for the motor trade," Brandon warned.

"Affordability continues to be a concern as the cost of living rises, compounded by a fourth successive fuel price hike, electricity increases and the looming possibility of further load shedding. Additionally, there is the threat of tariffs and a freeze on funding from the United States."

He added: "There are also positive developments on the horizon. We are hopeful about potential announcements during the President's State of the Nation Address (SONA) this week and a possible fourth interest rate decrease in March.”

According to naamsa figures, sales for medium and heavy truck segments of the industry reflected a mixed performance in January 2025, and at 569 units and 1 398 units, respectively, recorded an increase of 59 units, or 11.6% from the 510 units sold in January 2024 in the case of medium commercial vehicles, and in the case of heavy trucks and buses, a decrease of 40 vehicles, or 2.8%, compared to the 1 438 units sold in the corresponding month last year.

The naamsa CEO concurs that the positive start to the year, marked by higher new vehicle sales, a further interest rate cut of 25 basis points during the month, and well-controlled inflation, along with promising prospects for a significantly improved domestic economic outlook, all contribute to a sense of optimism for 2025.

Mikel says, however, that the trajectory of trade policies under the new US Administration remains uncertain. “It’s worth noting that the success and magnitude of US tariffs could have significant spillover effects on South Africa and other markets, potentially leading to increased export revenues and inflation.”