Mikel Mabasa, CEO of naamsa, said the new vehicle market continued its resilient performance during November 2022 despite a myriad of negative economic pressures.

These included rising interest rates, a drastic increase in load shedding, high fuel prices, a weak economy and ongoing stock supply shortages, he said.

Mabasa said the SA Reserve Bank, as expected, raised interest rates last month for the seventh consecutive time since November 2021 and the third consecutive time by 75 basis points to its highest level since 2016.

However, Mabasa said the new vehicle market continued to outperform expectations and, with only one month to go in the year, it was running 13.6% ahead of the corresponding period of 2021.

Mabasa said the recovery in business and leisure travel provided some support to the new vehicle market to counter the growing pressures on household incomes.

But Mabasa added that GDP growth in South Africa continued to be adjusted downwards and was now expected to be at 1.1% for 2023.

“In view of the close correlation between new vehicle sales and the country’s GDP growth rate, single digit growth in new vehicle sales could be expected for 2023,” he said.

Total new vehicle sales increased by 18.2% last month to 48 413 units from the 41 795 units sold in November 2021.

Of the total reported industry sales of 49 413 vehicles, an estimated 81.0% or 39 998 units represented dealer sales, 14.7% sales to the vehicle rental industry, 2.3% sales to government and 2.0% sales to industry corporate fleets.

Sales of new passenger cars grew by 16.9% to 32 859 units last month from the 28 100 units sold in November 2021, with sales to the car rental industry accounting for 20.0% of sales in the month.

Sales of new light commercial vehicles, bakkies and mini-buses improved by 20.8% year-on-year to 13 477 units, medium commercial vehicles by 17.5% to 900 units and heavy truck and bus sales by 22.6% to 2 177 units.

Export sales of domestically produced vehicles increased by 64.7% to 34 310 units in November from the 20 831 vehicles exported in November 2021.

Year to date vehicle exports at 326 516 units are now 17.9% higher than in the corresponding period in 2021.

WesBank head of marketing and communications, Lebogang Gaoaketse, said the latest increase in the prime lending rate to 10.5% practically meant the monthly instalment on a R400 000 car finance agreement has increased by at least R695 in the past year while over a 72-month agreement, a consumer would have to pay R50 000 more for a car.

“Despite this gloomy reality, new vehicle sales during November were certainly unaffected as the market recovered from logistics upsets from the previous month.

“In fact, November was the second-best selling month this year by a small margin compared to March sales,” he said.

Gaoaketse said WesBank expected the new vehicle market to continue its recovery as consumer confidence grew in the wake of slowly improving economic conditions.

“However, the headwinds of load shedding, the political outlook and the sheer reality of the increased cost of indebtedness will continue to put pressure on just how well new vehicle sales will perform in 2023,” he said.

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