Local domestic new vehicle sales reached their highest monthly total for 2024 in October, with industry players expressing cautious optimism amidst ongoing economic challenges. However, exports plummeted.

According to naamsa | The Automotive Business Council’s latest vehicle sales statistics released on Friday, aggregate domestic new vehicle sales for October 2024 reached 47 942 units, a 5.5% increase over the 45 418 vehicles sold in October 2023.

This increase of 2 506 units was largely driven by strong passenger car sales, marking October as the highest passenger car sales month since October 2019.

naamsa CEO Mikel Mabasa, said, “This positive start to the last quarter is encouraging for the medium-term outlook of the new vehicle market.”

However, export sales dropped by 42.6%, or 17324 units, down to 23 342 from 40 666 units the prior year. For the first 10 months of the year, vehicle exports were now 23.1% below the corresponding period 2023.

Mabasa attributed this decline in part to a “model change by a major local OEM, stricter emissions regulations in Europe, and an influx of lower-cost electric vehicles from China.”

Breaking down the domestic sales, Mabasa reported that “out of the total reported industry sales of 47 924 vehicles, an estimated 80.4% represented dealer sales, while 14.8% were sales to the vehicle rental industry, 2.6% to corporate fleets, and 2.2% to government.”

The October 2024 passenger car segment saw strong growth, with 34 228 units sold, a 14.5% increase over the 29 897 new cars sold in October 2023. Car rental companies played a notable role, accounting for 19.8% of passenger car sales, according to naamsa’s figures.

However, not all segments experienced growth. Domestic sales of new light commercial vehicles, such as bakkies and minibuses, dropped by 12.7% to 10 791 units, down from 12 367 units in October 2023. The medium and heavy truck segments also recorded a drop, with medium commercial vehicles down by 10.1% and heavy trucks and buses down by 7.1% compared to the corresponding period the previous year.

Brandon Cohen, the chairperson of the National Automobile Dealers’ Association, said, “Amid persistent economic challenges, the passenger vehicle market experienced its most significant monthly growth in five years, indicating a potential rebound in consumer confidence.

“Affordability is still a concern for buyers. This pressure is evident nationwide. We’re also witnessing competitive Chinese brands gaining traction, offering consumers affordable alternatives that are reshaping the market,” he said.

Lebo Gaoaketse, the head of marketing and communication at WesBank, said, “While positivity began creeping into the market during September, October new vehicle sales certainly provide signs of increased optimism.

“Rental and fleet volumes bolstered the market substantially, but an increase of 14.5% in passenger car sales overall indicates an uptick in consumer sentiment as the majority of these are retailed off showroom floors,” he said.

Several contributing factors have provided a more favourable outlook for consumers. Improved stability in the energy sector, a consistent decline in fuel prices, easing inflation (down to 3.8% in September), and a stronger currency have combined to create more positive conditions. Notably, an interest rate cut in September, the first in over three and a half years, set the stage for further anticipated monetary easing.

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

Looking ahead, Cohen said, “The South African automotive sector continues to adapt and evolve under challenging conditions. With ongoing government support, proactive consumer engagement by our dealer network, and positive economic indicators on the horizon, we remain optimistic about the industry’s role in South Africa’s broader economic recovery.”

Gaoaketse said, “We expect further relief in interest rates during November, which should continue to bolster consumer sentiment and business confidence. While the market will remain under pressure, all indicators suggest that the slow recovery will persist.”

BUSINESS REPORT