Stability has set in despite a host of negative influences

Demand for new vehicles outperforms potential preowned sales.

October 18, 2022

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“Consumers are clearly looking for value in the new vehicle market,” said Lebogang Gaoaketse, the head of marketing and communications at WesBank. “Despite the demand being in favour of new vehicle deals, the average deal size has remained consistent year-on-year, indicating that affordability remains a major consideration. Consumers are also making the choice in the face of preowned deals that display price inflation of over 20%.”
That may have contributed to the stable performance of September’s new vehicle sales because there were two major detractors that the market faced during the month. “Load-shedding will continue to impact consumer and business confidence negatively. But it is the second major increase in interest rates of 0.75% that should be expected to bring a more immediate bearing to purchase decisions made on financed deals,” said Gaoaketse. “It should also be considered that Toyota vehicle volumes are recovering to more normal levels as production and logistics return to their operations.”

September new vehicle sales ended the month on 47 786 units, 10.8% up year-on-year and just 440 units ahead of August sales, according to naamsa, the Automotive Business Council. The month’s performance was enough to make it the second-best sales month of the year after March.

Light commercial vehicles (LCVs) outran the market to grow 14.9% to 12,573. Dealers enjoyed the segment growth, registering 13.2% growth in sales off the showroom floor to 11 368. There was also a marked improvement (76.3%) in the rental market for LCVs, albeit in small volume of 654 units.

Rental demand did make a significant contribution to passenger car volumes, however. Up 22.3%, this added 6 117 units to the overall passenger car volume of 25 083, with the segment up 8.5% year-on-year during September.

“The September sales and the performance of the first three quarters will provide an interesting framework for industry experts to discuss the future of the industry later this month at the inaugural South African Auto Week,” said Gaoaketse.

WesBank has partnered with naamsa and the broader industry at the conference, which takes place at the Kyalami Grand Prix Circuit and Conference Centre from October 24 to 28. “The participation of the International Organisation of Vehicle Manufacturers members from 39 countries during the week will ensure that this pinnacle event also has a strong international flavour and shows the importance of the South African motor industry on the continent.”