New vehicle sales took a significant hit in March compared to March last year. However, WesBank identified two major factors contributing to this downturn.

Figures released by the National Association of Automobile Manufacturers of South Africa revealed a sharp 11.7% drop in the March new vehicle market, with sales totalling 44 273 units. While this decline undoubtedly impacted the industry, year-to-date sales are now down by 5.3% compared to the previous year. Yet, amid these figures, there’s still hope for April sales.

The early arrival of Easter public holidays in March 2024 resulted in a shorter selling month, with only 20 selling days compared to 22 in the previous year. Lebo Gaoaketse, the head of marketing and communication at WesBank, suggests that April sales might rebound to compensate for this imbalance, given the sustained high demand reflected in daily application rates.

March 2023 was a strong month for sales, recording 50 114 units sold, significantly surpassing other months. This makes for a skewed comparison, particularly as April, traditionally a low-sales month due to public holidays, has seen poor performance over the past two years.

Despite the apparent decline, March’s sales figures were only 1.1% lower than February’s performance. Passenger car sales experienced a notable 15.9% decline, raising concerns for retailers amid economic uncertainties.

On the other hand, light commercial vehicles saw a more resilient performance, dropping by 4.3% to 14 870 units. The segment’s year-to-date numbers show only a marginal 0.2% decrease for the first quarter, indicating relative stability.

However, challenges persist for South African motorists, with high interest rates, inflation and increasing fuel prices squeezing household budgets. Additionally, the pending elections in May are expected to dampen first-half performance as the market adopts a cautious stance.

Source: MotorPress/WesBank