Consequently, the new-vehicle market hasn’t been able to recover to the 2019 pre-pandemic level in four years and is likely to be delayed for another year.

So says the naamsa | The Automotive Business Council in its reaction to new-vehicle sales for December and 2024.

December 2024 sales:

For the third consecutive month there was a year-on-year increase in December 2024, with aggregate industry new vehicle sales of 41 273, an increase of 1 011 vehicles or a gain of 2.5% to the corresponding month in 2023.

The December 2024 new passenger car market reflected a sound performance with a year-on-year volume increase of 8.2% but in the case of light commercial vehicles a loss of 10.3%. Sales of medium commercial vehicles increased year-on-year by 7.6% while heavy commercial vehicles and buses decreased by 11.8%.

Vehicle export sales in December 2024 continued their downward trend and at 25 931 units reflected a loss of 1 158 vehicles or a decrease of 4.3% compared to December 2023.

Out of the total reported industry sales of 41 273 vehicles, an estimated 36 465 units or 88.4% represented dealer sales, an estimated 8.1% represented sales to the vehicle rental industry, 2.1% to government and 1.4% to industry corporate fleets.

Exports:

At the onset of 2024, the new-vehicle market was still only 0.9% below the pre-pandemic level of 536 612 units in 2019.

Despite a stronger year-end performance supported by strong seasonal sales to the vehicle rental industry, easing inflation and two interest rate cuts, new-vehicle sales for 2024 decreased by 3% to 515 712 units compared to the 531 775 units sold in 2023.

The following table summarises annual aggregate industry sales by sector from 2020 to 2024.

For the first time since the COVID-19 affected 2020, vehicle exports declined in 2024, to 308 830 units, down by a substantial 22.8% compared to the record performance of 2023 when the industry exported 399 594 units.

Various factors impacted the plummeting in vehicle exports, including a slowdown in demand in the EU, the domestic automotive industry’s key export region, owing to low economic growth, stricter emission rules and competition from cheaper electric vehicle imports from China in the region, as well as the timing effect of new model introductions in the domestic market by a major exporting OEMs.

A significant two out of every three vehicles manufactured in South Africa are exported, enabling the domestic OEMs to reach a much broader consumer base beyond the South African market.

The following table reflects the industry’s export sales performance from 2020 to 2024:

Hope in 2025:

According to naamsa, the confluence of positive economic indicators and the resilience of the volume passenger car segment during the last quarter of 2024 suggest a potential rebound for the new-vehicle market in 2025.

The South African Reserve Bank’s two interest rate cuts towards year-end, the first in four years, coupled with easing inflation, have created a more favourable economic environment. Further interest rate cuts in 2025 would support vehicle affordability across all the various segments.

With an improved GDP growth rate of around 1.5% projected for 2025, the new vehicle market would likely improve by single digits compared to the level of 2024, naamsa stated.

NADA:

In his reaction, Brandon Cohen, Chairperson of the National Automobile Dealers’ Association (NADA), says December vehicle sales rose for the third consecutive month and that this growth was primarily driven by an 8.2% rise in passenger car sales, with the rental industry continuing to play a significant role in the segment.

He noted that sales figures for December and January often lacked clarity owing to variations in OEM reporting cut-off dates. “To gain a more accurate understanding of end-of-year trends, it is generally better to combine the figures for both months and calculate an average,” he explained.

“The ongoing sluggish economy in South Africa continued to weigh on the new-vehicle market in 2024, despite some upticks in the passenger car segment during the fourth quarter. Meaningful growth is unlikely until the overall economy is revived, and we transition into a growth phase for our GDP,” Brandon says.