More cars were bought in October compared to the rest of 2024. Picture: iStock
South Africans bought more new cars in October than in the rest of 2024, with Toyota being the most-bought brand.
New vehicle sales data for October by the National Association of Automobile Manufacturers of South Africa (Naamsa) show there have been 47,924 cars bought, which is a 5.5% increase.
The Automotive Business Council say sales were driven by the demand from the rental sector and from the passenger car segment.
The council is of the view data from October provides a strong start to the final quarter and aligns with expectations for an improved second-half performance from the market.
October dethroned July as the month with most cars bought, as there was an increase of 3,695 cars bought. When compared to October 2023, October 2024 recorded a 2,506 increase in car sales.
Lebo Gaoaketse, Head of Marketing and Communication at WesBank say they saw an increase of 14.5% in passenger car sales overall indicating an uptick in consumer sentiment as the majority of these are retailed off showroom floors.
The council adds there has been positive news that drove the increase in sales. These include stability to the energy crisis, decreasing fuel prices, four consecutive months of declining inflation, and a stronger performance of currency against global markets.
“Interest rates were cut for the first time in three-and-a-half years in September and most economists expect a further cut during November as the start of an interest rate cutting cycle.”
Gaoaketse is of the view that these factors will over time provide relief to under-pressure households’ budgets. “But they will take time to stimulate new vehicle sales while those same budgets recover from rising debt.”
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WesBank is expecting the demand for credit to increase, however, the bank warns consumers of over-extending themselves in the euphoria of this light economic relief.
“Total cost of ownership is a vital consideration when purchasing a new vehicle. This has a substantial impact on affordability beyond the vehicle finance instalment.”
The passenger car market saw 34,228 vehicles being sold. This alone increased cars sold in the market by 4,331. However, Light Commercial Vehicle sales were down 1,576 units to 10,791.
“We expect further relief in interest rates during November, which should continue to bolster consumer sentiment and business confidence. While the market will continue to remain under pressure, all the indicators are in place for the slow recovery of the market to continue.”
Brandon Cohen, Chairperson of the National Automobile Dealers’ Association (NADA) 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.”
He added passenger vehicle sales marked a decline of 1.4% when compared to October 2023. While Light Commercial Vehicles (LCVs), including bakkies and minibuses, saw an 11.7% decrease.
Medium Commercial Vehicles recorded a 7.8% drop to 6,342 units, while Heavy Trucks and Buses declined by 4.7% to 19,766 units.
Also read: Weekly economic wrap: inflation lowest since March 2021
He acknowledged that the current economic landscape is challenging for South Africa, although inflationary pressures have shown a positive decrease over the past few months.
“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.”
Cohen added that when looking ahead, there are different factors that could increase consumer spending. This includes the two-pot retirement withdrawal system, which, in his view, may lead to higher disposable income in the coming months.
“Black Friday sales will serve as an early indicator of this trend, providing insights into evolving consumer behaviour as the year draws to a close.”
“The global economic landscape, including the upcoming U.S. elections, will likely influence trade policies, tariffs, and taxes, all of which could impact South Africa’s export market and currency stability.”
Toyota – 11,891
Volkswagen Group – 6,346
Suzuki Auto – 6,006
Ford Motor Group – 2,965
Hyundai Automotive SA – 2,913
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