Mikel Mabasa, the CEO of automotive business council, naamsa, said economic constraints on businesses and consumers continued to impact new-vehicle sales during the month as the rising cost of living and restrictive borrowing costs were depressing the demand for luxury goods.

Mabasa said the new-vehicle market’s prolonged recovery from the COVID-19 pandemic continued into 2023, with the expectation that the market would return to its 2019 level after three years.

He said the market was still 1.3% below the pre-pandemic level in 2022 and for the year-to-date was currently 2.1% ahead of the corresponding period in 2022 and on track to recover to the pre-pandemic level of 2019.

Mabasa said heavy commercial vehicle sales had already exceeded the pre-pandemic level in 2022 and was supported in its recovery by the transport of goods forced onto roads owing to rail inefficiencies.

“The country’s weak economic growth rate, although still marginally positive, remains a key challenge for the new-vehicle market going forward in view of the close correlation between new-vehicle sales and the GDP growth rate.

“Alongside faster economic growth, moderate inflation and lower interest rates will go a long way to support the new-vehicle market over the medium term,” he said.

Figures released on Wednesday revealed that total new vehicle sales declined by 2% year-on-year in October 2023 to 45 445 units from the 46 350 vehicles sold in the corresponding month in 2022.

Overall, out of the total reported industry sales of 45 445 vehicles, an estimated 80.2% or 36 468 units represented dealer sales.

An estimated 12.9% of total sales represented sales to the vehicle rental industry, 4.1% sales to government, and 2.8% sales to industry corporate fleets.

Sales of new passenger cars dropped by 3.5% to 29 912 units in October 2023 from the 30 980 new cars sold in October 2022.

Car rental sales accounted for 18.3% or 5 468 units of total new passenger vehicles sales.

Sales of new light commercial vehicles, bakkies and mini-buses declined year-on-year by 3% to 12 361 units last month while sales of medium commercial vehicles increased by 8.3% to 807 units and sales of heavy trucks and buses improved by 26% to 2 365 units in the same period.

WesBank head of marketing and communications, Lebo Gaoaketse, said the bank believed there was still room for optimism despite new-vehicle sales recording their third consecutive month of negative growth last month.

Gaoaketse said while this in theory represented a negative performance in the new-vehicle market, the performance of the market in October “should not be seen as a curse”.

He said South Africa’s new vehicle market showed year-to-date growth of 2.1% to 446 877 units compared to the first 10 months of last year, which represented a slow recovery in the market.

“This is a healthy 9 027 more new vehicles sold so far this year than in 2022, which remains a positive step in the market recovery,” he said.