Vehicle sales slump in South Africa

The downturn in vehicle sales is being driven by a number of factors, including rising interest rates, the weak rand, and increasing fuel prices. Passenger car sales fell by 6.7%, while commercial vehicle sales held up better, with light commercial sales up by 2.7%, medium truck sales up by 0.3%, and heavy truck and bus sales increasing by 10.4%.

The rental industry once again played a significant role in the market, accounting for 12.2% of total sales and 16.2% of car sales. The dealer retail channel accounted for 83.8% of the total sales, while corporate fleets made up 2.8%, and government entities only constituted 1.2% of the total sales.

Brandon Cohen, the national chairperson of the National Automobile Dealers’ Association, commented on the latest sales figures. “The resilience of the South African retail motor industry in 2023 continues to astound us, but we knew there had to be a tipping point, and this is what happened in August.”

Cohen says interest rates are currently the biggest obstacle to vehicle sales. “When we factor in new car pricing and the negative impact of a weak rand, we see a perfect storm of reduced affordability in a market with fewer and fewer cars available in various price brackets.”

He added that there is hope that interest rates will start to fall in the near future, which could help to boost the vehicle market. However, he warned that the ongoing fuel price increases are a major concern, and could continue to put pressure on demand.

Source: Ilana Salant