New vehicle sales decelerate for 8th month
JOHANNESBURG – Car manufacturers in South Africa (SA) are scrambling to avert a crash from the persistently stubborn downward spiral after new vehicle sales plunged for the eight consecutive month in March, which might see it miss the target for the year if the trend continues.
According to the Automotive Business Council (NAAMSA), domestic new vehicle sales fell by 11.7 per cent in March year-onyear, a decline of 5 877 units down to 44 237 units from the 50 114 vehicles sold in the same month last year.
Market
NAAMSA said the new vehicle market for March was dragged lower by a steep 27.1 per cent decline in export sales as they plummeted by 8 975 units to 24 161 units, compared to the 33 136 vehicles exported a year ago.
Vehicle exports reflected a mixed performance during the first quarter of 2024, following the record annual performance in 2023.
Since March concluded data for the first quarter 2024, this subdued print for March means that the aggregate new vehicle sales were now 5.3 per cent below the corresponding quarter in 2023.
The sector is targeting to sell between 540 000 and 565 000 new vehicles in 2024, a significant mountain to climb considering that only 532 098 units were sold in 2023 and 529 556 units sold in 2022.
NAAMSA Chief Executive Officer (CEO) Mikel Mabasa Mabasa, however, said prospects for the balance of the year remained upbeat on the back of new model introductions by major exporters while the global economic cycle is expected to bottom out in the first half of 2024.
Support
Mabasa said lower inflation, central bank easing and modest global economic growth were therefore, expected to support the automotive industry’s export performance.
“Due to ongoing cost pressures, including escalating fuel costs, along with interest rates, affordability remains a decisive factor in purchasing decisions as consumers increasingly turn to more budget-friendly vehicles,” he said.