Passenger-car sales show signs of recovery; exports continue to plummet

New-vehicle sales in October picked up some long-awaited momentum and increased by 5.5%, to 47 942 units, compared with the same month last year, driven by a recovery in passenger-car sales.

naamsa | The Automotive Business Council CEO Mikel Mabasa says the new-passenger-car market reached 34 228 units – a 14.5% jump compared with October a year ago.

“Car-rental sales accounted for a sound 19.8% of new-passenger-vehicles sales during the month.”

Sales of new bakkies, vans, small trucks and minibus taxis – light commercial vehicles – dropped by 12.7%, however, to 10 791 units.

Medium-truck sales declined by 10.1%, reaching 718 units, while heavy-truck and bus sales shrunk by 7.1%, to 2 187 units.

Export sales recorded an even more dismal performance, declining by a massive 17 324 units, or 42.6%, to 23 342 units.

For the first ten months of the year, vehicle exports were 23.1% below the corresponding period in 2023.

Mabasa says this downward trend can be linked to Europe’s economic struggles, with growth in the EU at 0.3% for the first nine months of the year, and with traditional powerhouse Germany projected to end the year at –0.2%.

Three out of every four vehicles exported from South Africa are destined for the UK and EU markets.

A model change by a major local vehicle manufacturer, stricter emission regulations in the region, as well as an influx of cheaper electric vehicles from China all impacted vehicle exports to Europe this year, says Mabasa.

“An easing of monetary policy in key export markets could see the vehicle export momentum turn positive again over the medium term,” he adds.

He also notes that the stronger performance in October in the overall domestic new-vehicle market bodes well for the rest of the year, as passenger-car sales serve as a key indicator of consumer sentiment.

Best Month of The Year
WesBank reports that October new-vehicle sales usurped July as the best performing month of 2024.

This aligns with expectations for an improved second-half performance from the market.

“While positivity began creeping into the market during September, October new-vehicle sales certainly provided tangible signs of increased optimism,” says WesBank marketing and communication head Lebo Gaoaketse.

This improved sentiment is being driven by a spate of positive news, such as an improvement in electricity supply, decreasing fuel prices, four consecutive months of declining inflation, and a stronger performance of the rand against global markets.

Interest rates were also cut for the first time in three-and-a-half years in September, and most economists expect a further cut in November.

“These factors will provide much-needed relief for stressed household budgets,” says Gaoaketse. “But they will take time to stimulate new-vehicle sales as those same budgets will need to recover from rising debt.”