New vehicle sales in South Africa plunged by 14.2% year-on-year in May as consumers and business played their final waiting card in search of political stability.
Figures released by the Automotive Business Council (Naamsa) yesterday showed the May new vehicle market declined by 6 137 units to 37 105, down from the 43 242 vehicles sold in the same month a year ago.
Export sales also recorded a substantial decrease of 5 712 units, or 19.1%, to 24 235 units in May 2024 compared to the 29 947 vehicles exported in May 2023.
The depressed result follows the blip of positivity in April as sales went up 2.2% year-on-year, which in turn had followed eight consecutive months of negative growth.
Naamsa said the encouraging performance in the new vehicle market during April 2024 was short-lived as national election jitters applied a handbrake on purchases of big-ticket items such as vehicles, along with an additional public holiday during the month.
“The South African Reserve Bank have held interest rates unchanged for the sixth consecutive meeting but now saw inflation only stabilising at its midpoint of 4.5% in the second quarter of 2025,” Naamsa said.
“While this is of some comfort to indebted consumers, the high lending rate combined with high inflation and relatively lower household income, will continue to negatively impact the new vehicle market. Once the rand exchange rate, consumer price inflation and fuel prices are under control, it will stimulate the whole economy and also the demand for new vehicles.”
Lebo Gaoaketse, head of marketing and communication at WesBank, said applications for new vehicle finance declined by double digits, while used vehicles maintained stronger interest, showing the weak demand as consumers and businesses waited for elections.
“Economic conditions remain tough for consumers within pressurised household budgets. Interest rates have once again been maintained at previous levels,” Gaoaketse said.
“Although the rate remains high, some analyst outlooks indicate that inflation has peaked, which could indicate lower rates during the second half of the year.”
BUSINESS REPORT