NADA upbeat about 2024 despite bumpy ride ahead

“The overall South African vehicle market managed to show some growth in 2023, which had seemed out of reach as the market declined in the second half of the year, and this is a good psychological boost for the industry as we enter 2024,” said Brandon Cohen, Chairperson of the National Automobile Dealers’ Association (NADA).

Cohen said the outlook for 2024 was cautiously optimistic, especially going into the second half of the year with expectations that interest rates should come down in the next few months on the back of lower fuel prices and hopefully a gradual decline in inflation.

“We will be closely monitoring currency exchange rates as these are very fluid owing to the global factors affecting them, such as wars, natural disasters and the many general elections pending worldwide in 2024, including right here in South Africa.

“This year will certainly not be a leisurely ride and will again require resilience and commitment from the dealer network,” he warned.

Cohen said new vehicle sales in December declined year-on-year for the fifth consecutive month to 40 329 units but these decreases were sufficient to drag total new sales in 2023 to below that of the previous year.

Total new vehicle sales in 2023 improved by only 0.5% to 532 098 units from the 529 556 units in 2022.

Cohen said importantly sales improved in 2023 although not on the scale hoped for to exceed 2019 pre-COVID-19 pandemic sales levels.

He said the reported sales figures for December 2023 and January 2024 tend to get blurred by the different reporting strategies of the original equipment manufacturers (OEMs) in terms of reporting cut-off dates.

It is usually best to wait for the end of January and combine the December and January figures and divide them by two to get an accurate picture of the end-of-year trends, he said.

Cohen said, overall, dealers last year had to cope with tough market conditions that were arguably the toughest since 2007, or even 1998, in terms of economic pressure on consumers. He said this led to some overstocking, putting importers, distributors and manufacturers under significant pressure to facilitate stock movement.

“Consequently, efforts were made to enhance market activity through year-end incentives, ensuring sustained sales momentum,” he said.

Cohen said the good news in 2023 was that new vehicle exports grew by 12.7% to 396 290 units, a new record, from the 351 785 export sales achieved in 2022.

The previous export sales record of 387 092 units was set in 2019.

“This was a heartening performance for the local manufacturers as vehicle exports are key to their sustainability,” he said.