- On Tuesday naamsa revealed the woeful state of South Africa’s new vehicle sales market.
- Sales are down across the board with only heavy commercial and bus sales showing improvements.
- Toyota emerged as the top brand based on sales with Ferrari failing to move a single unit in the first quarter of 2024.
On Tuesday, naamsa released figures for new vehicle sales throughout March 2024 and it’s not the best news with only Heavy Commercial and Bus sales seeing an improvement year-on-year.
Compared to March 2023, new vehicle sales were down 11.7 percent at 44 237. That’s 5 877 fewer compared to the 50 114 sold in March of last year.
Despite this those that did manage to garner a few sales did well and naamsa highlighted the top 15 manufacturers, based on their sales.
- Toyota
- Volkswagen
- Suzuki
- Nissan
- Isuzu
- Hyundai
- Ford
- GWM
- Chery
- Renault
- Mahindra
- BMW
- Kia
- Mercedes-Benz
- FAW Trucks
Toyota performed well compared to the rest of the market and while naamsa says that the figures from Mercedes-Benz and BMW are merely an estimate, the export figures are incredibly impressive.
The worst performing manufacturer for the quarter was Scuderia South Africa or Ferrari. The manufacturer didn’t move one unit in this first quarter and is the only manufacturer on naamsa’s list with zero sales. Even VE Commercial Vehicles – which we’ve never heard of until today – managed to move seven units in the quarter.
“The new vehicle market continued its downward slope in March 2024, which already commenced eight
months ago. For the first quarter 2024 aggregate new vehicle sales were now 5,3% below the
corresponding quarter in 2023. The effect of the South African Reserve Bank’s aggressive monetary
policy stance by hiking interest rates in an attempt to contain inflation took some time to filter through to
new vehicle sales, which continue to add to the prevailing negative sentiment. Due to ongoing cost
pressures, including escalating fuel costs, along with interest rates, affordability remains a decisive factor
in purchasing decisions as consumers increasingly turn to more budget-friendly vehicles,” naamsa wrote in a press release.
Unfortunately, exports from March 2024 were also down as much as 27.1 percent compared to the same period in 2023.
This is bad news for the economy overall as, according to naamsa, the automotive industry contributes a 4.9 percent to South Africa’s gross domestic product (2.9 percent from manufacturing and 2 percent from retail).
Aside from the economic factors, chairperson of the National Automobile Dealers’ Association, Brandon Cohen, says other factors lead to decreased sales. School holidays and an abundance of public holidays influenced consumer behaviour. March also marks the end of the financial year for many companies which would have undoubtedly influenced buying decisions.
“Despite the challenges faced in March, the consistent resilience and adaptability demonstrated by South Africa’s franchised motor dealers are indicative of their enduring strength in navigating dynamic market conditions. While the month marked a continuation of declining retail vehicle sales, insights suggest promising fiscal performances for several industry stakeholders. As we move forward, our focus remains on building momentum and driving growth within the retail automotive sector,” Cohen said.
That upbeat attitude is shared by naamsa which says that the prospects for the rest of 2024 look good thanks to new models being released, lower inflation, central bank easing, and global economic growth.
“South Africa’s economic growth outlook for 2024 remains mooted, but at a projected 1,2% by the SA Reserve Bank it would still be stronger than 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, which rose to its most upbeat level since the start of 2023,” the council wrote.
[Image – Karolina Grabowska from Pixabay]
