May stats show uptick in motoring sector’s new vehicle sales

May marks the eighth consecutive month of growth in new vehicle sales.

The South African Reserve Bank (SARB) has shifted monetary policy by cutting the repo rate by 25 basis points, signalling a welcome policy pivot that will support industrial growth, affordability and economic stability going forward.

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“SARB’s latest decision is both timely and commendable. It directly supports consumer affordability and boosts production competitiveness at a time when global uncertainty is weighing heavily on our export markets,” said Automotive Business Council (Naamsa) CEO Mikel Mabasa.

Spike in new vehicle sales

Aggregate domestic new vehicle sales for May sit at 45 308 units, an increase of 22% or 8 169 units from May 2024 – the biggest growth in new vehicle sales since July 2022.

Of these sales, an estimated 40 062 (88.2%) came from dealer sales, 6.8% from sales to the vehicle rental industry, 3% to industry corporate fleet, and 1.8% to government sales.

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The month registered a 7 322 (30%) increase in passenger car sales at 31 741 units, with 8.5% of those being car rental sales.

The month also saw new light commercial vehicles, bakkies and minibuses rise 5.8% to 10 938 units; medium and heavy trucks and buses rise to 660 and 1 969 units – a 22.7% and 6.7% increase respectively from May 2024.

Last month’s top performing manufacturers in total vehicle sales were Toyota with 10 330 local sales, Suzuki Auto with 5 536, Volkswagen Group SA with 4 582, Hyundai Automotive South Africa with 3 251, and Ford Motor Company with 2 932.

Cautiously optimistic

While these numbers are positive, WesBank head of marketing and communication Lebo Gaoaketse warns to be cautiously optimistic. May 2024 was an election month with depressed sales, which provides some context to these increases.

“Twelve months ago, South Africans voted at the polls, not on showroom floors,” said Gaoaketse.

“First quarter sales performed better by volume, while displaying slower growth,” he noted, indicating the month was a solid volume performance, rather than an overriding reason to celebrate.

Keeping this in mind, year-to-date sales now stand at 231 719 units, up 12.6% with one month of the first half to go.

Going forward, SARB’s decision will add further momentum to those gains, while improved credit conditions for consumers, inflation easing to 2.8%, the rand regaining strength, and improving consumer and investor sentiment add to a macro-economic environment more conducive to spending and investment.

However, while this is a vital step forward in strengthening the automotive sector’s resilience, geopolitical tensions and the lingering tariff discussion are still a risk, and not all indicators have moved in the right direction.

Vehicle export sales decreased by 5 165 units or 14.6% from May 2024 to 30 112 units, but are at least still 1.4% ahead of the same year-to-date period last year.

A major exporting OEM halted production for a period between April and May, which likely had a large impact on exports during a crucial time for maintaining export competitiveness.

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