Market disruptions, election jitters, and plummeting exports

South Africa’s new vehicle market remains closely tied to broader economic conditions in the country. With the first half of 2024 being particularly challenging, annual new vehicle sales fell compared to 2023, even though Q4 of 2024 was promising. Consequently, the new vehicle market is yet to recover to pre-pandemic levels, and this will likely be delayed for another year.

The decline in annual new vehicle sales was driven predominantly by a significant decrease of 12% in light commercial vehicle (LCV) sales compared to 2023, reports naamsa | The Automotive Business Council. New medium commercial vehicle (MCV) sales also dropped by
6.5%, while 4.9% fewer heavy commercial vehicles (HCVs) and buses were sold. December also saw a loss of 10.3% in year-on-year monthly sales for LCVs and 11.8% for HCVs and buses, but MCV sales increased year-on-year by 7.6%.

“The industry anticipated a year of two halves with a taxing first half of the year and with brighter economic prospects and an upswing in new vehicle sales during the second half of the year, which unfortunately did not materialise,” notes naamsa.

“New vehicle sales remained under pressure in 2024, continuing to reflect a shift in the matrix with various new entrants in the domestic market, in particular Chinese brands, offering options at the more affordable end of the pricing spectrum as consumers battled a tough economic climate.”

The table below summarises annual aggregate automotive industry sales and export sales by sector from 2020 to 2024.

Vehicle exports plummet

LCV and truck and bus exports both fell by almost 20% in 2024, from 140,529 to 115,192 units and 799 to 646 units respectively.

For the first time since the pandemic-affected 2020 figures, vehicle exports declined in 2024, to 308,830 units, down by a substantial 22.8% compared to the record performance of 2023, when the industry exported 399,594 units. Various factors impacted the drop in vehicle exports, including a slowdown in demand in the EU – the domestic automotive industry’s key export region – due to low economic growth, stricter emission rules, and competition from cheaper electric vehicle imports from China in the region, as well as the timing effect of new model introductions in the domestic market by major exporting OEMs.

Source: naamsa, Lightstone Auto