New vehicle sales take a tumble in March

The constrained business environment amplified by weak consumer demand and the Easter holidays has affected the new vehicle market’s performance, automotive business council Naamsa said.

Naamsa reported new vehicle cars sales of 44,237 units in March 2024 was a decline of 5,877 units, down 11.7% from the 50,114 vehicles sold in March 2023.

The first-quarter 2024 aggregate of new vehicle sales was 5.3% below the corresponding quarter in 2023 and year-to-date sales were 84,837 units compared with 92,246 in March 2023.

The split of domestic sales saw new light commercial vehicles, bakkies and minibuses at 14,870 units during March 2024, a decline of 672 units, or a loss of 4.3%, on the 15,542 light commercial vehicles sold in March 2023.

The medium truck segment recorded sales of 726 units, which was 136 short of the same period in 2023. The heavy truck segment reflected a decline of 45 vehicles for March 2024, with 2,064 units sold compared with the 2,109 units sold in the corresponding month in 2023.

Year-on-year export sales also recorded a decline of 8,975 units, or 27.1%, to 24,161 units in March 2024 compared with the 33,136 vehicles exported in March 2023. First-quarter 2024 results show a 4.,9% decrease vs the corresponding quarter in 2023.

The effect of the South African Reserve Bank’s interest rate hikes took some time to filter through to new vehicle sales which continue to add to the prevailing negative sentiment.

Considering the rate of applications per day was up against March last year, the levels of demand remain high.
— WesBank head of marketing and communication Lebo Gaoaketse

Due to cost pressures, including the escalating fuel price, with interest rates, affordability remains a decisive factor in purchasing decisions as consumers increasingly turn to more budget-friendly vehicles.

Better economic prospects are expected for the new vehicle market only after the interest rate cutting cycle commences, which is likely to be during the second half of 2024.

WesBank head of marketing and communication Lebo Gaoaketse said: “The broader economy remains a challenge for motorists. With interest rates unchanged again, they remain high amid generally high inflation. Fuel price increases again this week continue to place pressure on household budgets and their ability to service debt.

“But considering the rate of applications per day was up against March last year, the levels of demand remain high,” Gaoaketse said, adding the market would inevitably be cautious with upcoming elections in May dampening first-half performance

National Automobile Dealers’ Association chair Brandon Cohen commended South Africa's franchised motor dealers for their new vehicle sales performance amid exceptionally challenging market conditions in March.

“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 in the retail automotive sector,” he said.

Top 10 vehicle sales by manufacturer in March