Sales slump in May

National election jitters put a handbrake on new vehicle sales in May 2024.

May sales

Mikel Mabasa, the CEO of automotive business council, naamsa, says the welcomed uptick in new vehicle sales during April 2024 did not continue during the month of May.

“The encouraging performance in the new vehicle market during April 2024 was short-lived as national election jitters put a brake on purchases of big-ticket items, such as vehicles,” he says.

Total new vehicle sales in April 2024 showed positive growth after eight consecutive months of year-on-year decline by registering a 2.2% increase to 38 172 units from the 37 358 vehicles sold in April 2023.

Figures released on Monday revealed that aggregate domestic new vehicle sales in May 2024 slumped by a substantial 14.2% to 37105 units from the 43 242 vehicles sold in the corresponding month in 2023.

Overall, out of the total reported industry sales of 37105 vehicles, an estimated 89.4% or 33 191 units represented dealer sales, 4.5% sales to the vehicle rental industry, 3.1% sales to industry corporate fleets and 3.0% sales to government.

Sales of new passenger cars dropped by 11.7% to 24 367 units in May 2024 from the 27 579 units sold in the corresponding month in 2023.

Sales to the vehicle rental industry accounted for 5.7% of new passenger vehicles sales during the month.

Sales of new light commercial vehicles, bakkies and mini buses declined by 19.5% to 10 334 units last month from the 12 832 unit sales registered in May 2023.

There was also a weak performance by the medium commercial vehicle and heavy truck and bus segments, with sales of medium commercial vehicles dropping year-on-year last month by 7.3% to 533 units and heavy truck and bus sales by 17.1% to 1 871 units.

Mabasa says the additional public holiday during the month, together with national election jitters, likely put a hold on purchases of big-ticket items such as vehicles.

However, he says a second consecutive full month of no load-shedding was welcome while oil prices have remained relatively low owing to sluggish demand in the global markets, which support the manufacturing industry.

Mabasa adds that the SA Reserve Bank held interest rates unchanged for the sixth consecutive meeting but now saw inflation only stabilising at its mid-point of 4.5% in the second quarter of 2025.

“While this is of some comfort to indebted consumers, the high lending rate, combined with high inflation and relatively lower household income, will continue to negatively impact the new vehicle market.

“Once the rand exchange rate, consumer price inflation and fuel prices are under control, it will stimulate the whole economy and also the demand for new vehicles,” he says.

Mabasa says vehicle exports continued to decline owing to the sluggish global economic recovery.

Sales of South African manufactured new vehicles decreased by a substantial 19.1% (5 712 units) in May 2024 from the 29 947 units exported in the corresponding month in 2023.

Mabasa says new vehicle export sales for the first five months of 2024 were now 11.6% lower than in the corresponding period in 2023.

“The US inflation rate has remained benign over recent months, which could result in an easing of interest rates later in the year. This could also result in other central banks commencing with interest rate cuts, which would support South African vehicle exports,” he says.

More information: AVAF Infographic May 2024

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