Vehicle market sales growth in 2023 small but positive

Vehicle sales data as provided by the National Automobile Dealers’ Association (NADA) at the end of December 2023 showed there is some hope for 2024.

“The overall South African vehicle market managed to show some growth in 2023, which had seemed out of reach as the market declined in the second half of the year, and this is a good psychological boost for the industry as we enter 2024,” said Brandon Cohen, NADA’s chairperson.

Sales in December of 40 329 units marked the fifth consecutive month of year-on-year declines, but these decreases were not enough to pull the 2023 total below that of the previous year. The margin was only 0.5%, with 532 098 units sold in 2023 compared to 529 556 in 2022.

Importantly, it was an improvement, although not on the scale of the hoped-for pre-pandemic levels.

The good news was that exports hit a new record of 396 290 units, which was 12.7% better than 2022. This was a heartening performance for the local manufacturers as vehicle exports are key to their sustainability.

“The reported sales figures for December and January tend to get blurred with the different reporting strategies of the OEMs in terms of reporting cut-off dates, so it is usually best to wait for the end of January when one can combine the December and January figures and divide them by two to get an accurate picture of the end-of-year trends,” explained Cohen.

“Overall, last year, the dealers had to cope with tough market conditions that were arguably the toughest since 2007 or even 1998 in terms of economic pressure on consumers. This led to some overstocking, placing importers, distributors and manufacturers under significant pressure to facilitate stock movement. Consequently, efforts were made to enhance market activity through year-end incentives, ensuring sustained sales momentum.

“The outlook for 2024 is cautiously optimistic, especially going into the second half of the year, with expectations that interest rates should come down in the next few months on the back of lower fuel prices and hopefully a gradual decline in inflation. We will closely monitor currency exchange rates, as these are very fluid due to the global factors affecting them, such as wars, natural disasters and the many general elections pending worldwide in 2024, including here in South Africa.

“This year will certainly not be a leisurely ride, and will again require resilience and commitment from the dealer network,” said Cohen.

Source: MotorPress