Gary McCraw, the director of (NADA), said the new vehicle market returned stronger than expected sales during the month, keeping total year-to-date sales at 218 869 units 3% above the figure for the first five months of 2022.

"The retail motor industry is, naturally, delighted at the unexpected extent of the upswing, with dealers responsible for selling 90.2% of the total volume," he said.

McCraw said the general feeling among industry commentators in South Africa had pointed to a slowdown in new vehicle sales in May because many consumers had turned their attention to investing in solar panels and inverters instead of new cars, while businesses had to contend with increased load-shedding in addition to a 10th consecutive hike in interest rates.

He said a contributing factor to the better-than-expected sales was that several brands had started offering incentives to encourage new vehicle buyers.

“This is something we haven't seen much of since the pandemic.

“Another factor could be that many dealers have accumulated stock and were concerned about being left with an excessive inventory if the market took a downturn.

As a result, they have turned to more aggressive marketing strategies on new models.

"Going forward it will be interesting to see if the pace can continue in an environment where sales growth is seen as being somewhat against the odds,” he said.

McCraw added that certain dealers focused on sales before the interest rate announcement to allow customers to take advantage of lower rates.

“This activity early in the month certainly benefited sales volumes during May. However, purchase consideration didn’t deteriorate after the rate increase, driven by the ongoing trend towards smaller, more affordable vehicles," he said.

McCraw explained that prior to the release of these buoyant sales figures, the prospects seemed rather bleak, with the latest interest rate escalations making it difficult for consumers to make repayments on bonds and new-car finance that had been doable a year ago.

“Then trade-ins appeared lower as the national used vehicle groups had a difficult period owing to the hangover from a three-year buying frenzy, affecting margins negatively," he said.

Commenting on the significant 67.5% year-on-year increase in vehicle exports, McCraw said it was important to note that the low export figure in May 2022 was mainly owing to the devastating floods in KwaZulu-Natal in April 2022.

These floods damaged Toyota South Africa Motors’ production plant in Prospecton in Durban, leading to its closure for several months.