SA vehicle sales defy interest rate and costs…

This is the reaction of Brandon Cohen, National Chairperson of the National Automobile Dealers Association (NADA), after studying the retail figures for May distributed today by naamsa | The Automotive Business Council.

May sales reached 51 071 units; the highest monthly total recorded since May 2013 and represented a 12.8% increase over May 2025. Importantly, 90.1% of these sales flowed through South Africa's retail dealer network, underlining the continued strength of consumer demand.

The positive momentum extends beyond a single month. Total industry sales for the first five months of 2026 reached 260 909 units, 12.5% ahead of the corresponding period in 2025, with all major vehicle segments recording growth.

"Given the recent interest rate increase, ongoing cost-of-living pressures and concerns around consumer affordability, many expected vehicle demand to come under greater pressure. Instead, the market continues to show surprising resilience, supported by replacement demand and consumers' ongoing need for personal mobility," Brandon says.

"Customers are spending more time evaluating options, comparing finance offers and considering total cost of ownership before committing to a purchase. Dealers are having to work harder to convert enquiries into sales, but the demand is still there," he says.

Passenger vehicle sales led the market's performance, increasing 16.3% year-on-year to 36 987 units.

Light commercial vehicle sales improved by 2.5% to 11 251 units, while the medium and heavy commercial vehicle segments also recorded encouraging growth, reflecting ongoing activity in key sectors of the economy.

"Fuel prices and running costs remain important considerations for buyers, particularly in the volume segments of the market. Affordability is increasingly influencing purchasing decisions, with consumers paying closer attention to fuel efficiency, maintenance costs and overall value," Brandon adds.

Ryan Seele, an executive member of NADA, says dealers were also seeing growing interest in alternative propulsion technologies.

"We are seeing a noticeable increase in discussions around hybrid and electric vehicles. Consumers are asking more informed questions about fuel savings, operating costs and long-term ownership benefits. While new energy vehicles still account for a relatively small portion of overall sales, awareness and consideration levels have increased significantly."

Rayn noted that demand remained strongest below the R500 000 price point, where affordability considerations are most acute.

"At the same time, the premium segment has remained surprisingly resilient, supported largely by cash buyers who are less exposed to interest rate movements and financing costs."

Brandon concludes by saying the challenge for the remainder of the year will be whether consumers can continue to absorb higher financing costs and rising living expenses.