Slow growth in new vehicle sales predicted for 2024

Nada chairperson, Brandon Cohen, said the new year has kicked off with the expected flat trend for new vehicle sales.

“It was generally predicted that the first half of 2024 would see little growth in the overall market after declines in each of the last five months of 2023,” he said.

Cohen said last month that various companies vary the timing of their reporting periods over the months of December or January, and generally these months need to be read together.

He said the January total of 41 636 units was remarkably similar to the total of 40 329 unit sales in December 2023 but was 3.8% lower than the total sales registered in January 2023.

Of the total reported industry sales of 41 636 vehicles, an estimated 35 108 units or 84.3% represented dealer sales, he said.

“It seems the dreaded ‘Januworry’ has taken effect with a further decline in consumer affordability owing to the cost-of-living increases and the uncertain political climate of an election year.

“Even the fact that the vehicle rental industry bought 11.5% of the total vehicles

sold in January could not prevent another month of decline,” he said.

Sales of passenger cars dropped by 6.7% while light commercial vehicles were up by 2.3%, medium commercial vehicle sales rose by 13.3% off a low base, and the heavy truck and bus market grew 7.9% compared to sales recorded in January 2023.

“There is now a lot of focus from dealers, manufacturers, distributors, component

manufacturers and consumers on what the government will have to say at the President’s State of the Nation Address on 8 February and the Finance Minister’s National Budget Speech on 21 February.

“Hopefully, there will be some good news that could lend to an improvement in consumer sentiment or, from an industry perspective, more certainty in the Budget speech about the regulatory framework for selling and manufacturing new energy vehicles,” he said.

Mikel Mabasa, the CEO of naamsa, said the automotive business council was also looking forward to details regarding new energy vehicles (NEVs) in the 2024 Budget.

Mabasa said naamsa believed this announcement would provide a much-needed injection of confidence into the South African automotive industry to accelerate its inevitable transition to electric vehicles and associated component production and in stimulating demand for these new technology vehicles.

Lebo Gaoaketse, Head of Marketing and Communication at WesBank, said motorists remained under pressure in the total mobility basket.

“With interest rates stable, but still high, fuel price increases expected during February, consumer price inflation, which was still on the high end of the target band, and elections looming, economic uncertainty is the reality for most households and businesses, and potential new vehicle buyers will remain wary of big financial commitments,” he said.

However, Gaoaketse said WesBank expected many opportunities to flow from efforts to stimulate demand in the market.

“Banks may increase their risk appetite with lower quoted rates on deals to capture market share.

“Brands and dealers will also be hungry to convert sales, offering enticing incentives that may provide an opportunity for the market to remain buoyant,” he said.