Naamsa CEO, Mikel Mabasa, said last month's [March] 50-basis point increase in the repo rate to 7.75% by the Reserve Bank and the subsequent increase in the prime lending rate to 11.25% are already having an impact on “a shrinking disposable income purse” many consumers rely on when making new-vehicle purchase decisions.

Mabasa added that buying a new car was the second largest investment decision made by many South African households.

He attributed modest new vehicle sales and exports sales in March 2023 to the impact of interest rate hikes, the Human Rights Day public holiday and the National Shutdown on 20 March 2023, which resulted in many dealers opting to close shop and vehicle manufacturers operating in hotspot metros also halting production.

Figures released on Monday showed that total new vehicle sales declined by 0.6% to 50 157 units in March 2023 from the 50 465 units sold in the same month in 2022.

An estimated 87.3% or 43 801 units out of the total sales recorded in the month represented dealer sales, with an estimated 6.1% representing sales to the vehicle rental industry, 4.1% to government and 2.5% to industry corporate fleets.

Sales of new passenger cars declined by 6.4% to 31 631 units from the 33,788 units sold in March 2022.

Vehicle dealerships accounted for 85.9% of total new-car sales in the month.

Sales of new light commercial vehicles, bakkies and mini-buses increased year-on-year by 11.1% to 15 529 units, medium commercial vehicles by 10.1% to 870 units and heavy trucks and buses by 11.1% to 2 127 units.

Year-to-date new-vehicle sales for the first quarter of 2023 at 139 437 units were 2.4% higher than for the corresponding period in 2022.

Exports of locally produced new vehicles increased by 3.1% to 34 134 units last month from the 33 108 vehicles exported in March 2022.

Mabasa said that while vehicle production was ramping up and the overall performance of vehicle sales and export sales has been steadily improving, the continued tightening of monetary policy, slowing domestic and global growth and energy shortages would have a greater spill-over to the overall performance of the industry this year.

“With this being said, naamsa remains upbeat about our forecast for domestic sales to grow by 6.3% [to 563 000 units] in 2023 and export sales by 8.3% [to 380 900 units],” he said.

Lebogang Gaoaketse, Head of Marketing and Communications at WesBank, said March was a long sales month, despite the public holidays and that the month's new-vehicle sales performance mirrored what was the best-selling month in 2022.

“Both March 2022 and 2023 have been the only sales months to breach the 50 000-unit level since October 2019,” he said.

View more here: AVAF Infographic naamsa March 2023