National Automobile Dealers Association (Nada) chairperson, Brandon Cohen, is also encouraged by the positive shift in monthly retail new vehicle sales last month.

"Although the increase was modest at 1.5% compared to the same month last year, the sale of 44 229 units is encouraging,” he says.

Naamsa CEO Mikel Mabasa says the new-vehicle market responded positively during July 2024 in anticipation of improved economic prospects during the second half of the year, with increased seasonal sales to the vehicle rental industry contributing to the higher sales during the month.

Mabasa says although aggregate new vehicle sales for the year-to-date remained 6.3% below the corresponding period in 2023 and despite various challenges and elements of economic uncertainty, original equipment manufacturers (OEMs) and importers continue to launch new products into the marketplace.

“Encouraging aspects for growth and increased consumer spending for the balance of the year include four consecutive months of no load-shedding, a stronger rand exchange rate and potentially up to two interest rate cuts before year-end,” he says.

Figures released on Thursday revealed that total domestic new vehicle sales increased by 1.5% to 44 229 units last month from the 43 572 vehicles sold in July 2023.

Of the total reported industry sales of 44 229 vehicles, an estimated 81.1% or 35 853 vehicles represented dealer sales, an estimated 13.5% sales to the vehicle rental industry, 2.9% sales to government and 2.5% sales to industry corporate fleets.

Sales of new passenger cars increased by 6.8% to 29 934 units last month from the 28 040 units sold in July 2023.

Mabasa says car sales to the vehicle rental industry accounted for a sound 17.1% of new passenger vehicles sales during the month.

Sales of new light commercial vehicles, bakkies and mini-buses dropped by 8.8% year-on-year to 11 554 units from 12 666 units in the corresponding month in 2023.

Sales of medium commercial vehicles declined by 6.6% year-on-year to 641 units in July 2024 while heavy truck and bus sales dropped by 3.7% to 2 100 units.

Cohen says although total new vehicles sales year-to-date remain 6.3% lower than in 2023, Nada is hopeful the sales registered in July 2024 mark the beginning of growth in the second half of the year.

However, Cohen says the new vehicle market had significant ground to cover before the end of the year but indicated that consumers are beginning to visit dealerships more frequently.

“Confidence in the country and overall sentiment are improving, leading people to gradually return to car purchases.

“However, high interest rates and the unsustainably high cost of living continue to impact vehicle finance accessibility.

“While there is a clear desire for vehicles, affordability remains a significant barrier," he says.

Cohen says there are positive indications that interest rates may be reduced by 25 to 50 basis points before the end of the year, adding that “some consumers are already factoring this potential change into their purchasing decisions”.

More results here: AVAF Infographic July 2024