Total domestic new vehicle sales declined by 11.7% to 44 237 units last month from the 50 114 vehicles sold in March 2023 as the market continued its downward slide that commenced eight months ago.

Total new vehicle sales for the first quarter of 2024 are now 5.3% lower than in the corresponding quarter last year.

Out of the total reported industry sales of 44 237 vehicles, an estimated 88.2% or 39 016 units were sold by franchised dealers, and an estimated 6.0% represented sales to the vehicle rental industry, 3.5% to government and 2.3% to industry corporate fleets.

Naamsa CEO, Mikel Mabasa, says the effect of the South African Reserve Bank’s aggressive monetary policy stance by hiking interest rates in an attempt to contain inflation continues to add to the prevailing negative market sentiment after the higher interest rates took some time to filter through to new vehicle sales.

Mabasa says affordability remains a decisive factor in new vehicle purchasing decisions owing to ongoing cost pressures, including escalating fuel costs and high interest rates, leading to consumers increasingly turning to more budget-friendly vehicles.

He says South Africa’s economic growth outlook for 2024 remains mooted but with a projected GDP growth rate of 1.2% by the SA Reserve Bank, it will still be stronger than in 2023.

“Only once the interest-cutting cycle commences, likely during the second half of the year, along with the easing of inflation, better economic prospects are expected for the new vehicle market.

“This is underscored by the Absa Purchasing Managers’ Index (PMI), which reflected a further improvement in sentiment towards business in six months’ time and rose to its most upbeat level since the start of 2023,” he says.

Sales of new passenger cars slumped by 15.9% to 26 577 units last month from the 31 601 units sold in March 2023.

Car rental sales accounted for 7.8% of new passenger vehicles sales during the month.

Sales of new light commercial vehicles, bakkies and minibuses declined year-on-year by 4.3% to 14 870 units in March this year, medium commercial vehicles by 15.8% to 726 units and heavy truck and bus sales by 2.1% to 2 064 units.

WesBank head of marketing and communication, Lebo Gaoaketse, says two major factors conspired to seemingly indicate that new vehicle sales plummeted in March 2024 compared to the corresponding month in 2023.

Gaoaketse says these factors were the particularly early calendar impact of the Easter public holidays, which meant March 2024, with 20 selling days, was a much shorter selling month than March last year with 22 selling days, and the fact that March 2023 was the best new vehicle sales month in 2023.

“Statistically, this provides a skewed comparison in context, especially given that April sales – during which the public holidays usually fall – was the worst-selling month for the past two years.

“So, while March sales appeared dreadful, down 5 841 units year-on-year, they were only 1.1% down on February’s performance,” he says.

Gaoaketse expressed the hope that sales in April 2024, without the Easter public holidays, will bounce back and provide some level of correction against last year’s sales.

He added that the rate of finance applications per day was higher last month compared to March 2023, indicating that the level of demand remains high.

More results: AVAF Infographic March 2024