South Africa’s economy is expected to ramp up significantly in the final quarter of the year after November saw a surge to become the “best sales month of the year” for new vehicle sales.

According to statistics from the Automotive Business Council (Naamsa), aggregate domestic new vehicle sales in November rose by 8.1% to 48 585 units, reflecting an increase of 3 658 units, from the 44 927 vehicles sold in November 2023.

The strong performance, which saw volumes for the month replacing October as the best sales month of the year, was driven by fleet deals from the rental companies, driving passenger car sales up 20% to 35 101 units, as consumer demand softened year-on-year.

Not only was November the year’s best sales month, but also the largest market growth of the year as October sales had been 5.5% up year-on-year.

Naamsa said that a second consecutive increase in the monthly new vehicle sales could signal the start of the long-awaited upward trend in the new vehicle market.

It came just after the South African Reserve Bank (SARB) decided to cut interest rates by a collective 0.5% in two consecutive meetings in September and November, respectively.

“Robust new passenger car sales once again stood out as a shining beacon in a new vehicle market reflecting a mixed performance during November 2024,” Naamsa said.

“Along with sound seasonal sales to the vehicle rental industry and five consecutive months of lower consumer inflation, a second interest rate cut of 25 basis points by the SARB during the month sparked positive sentiment.

“In view of the stronger year-end performance, new vehicle sales were now only 3.5% below the corresponding period 2023, but unlikely to return to the pre-pandemic level after four years in 2024. Further interest rate cuts in the new year would support vehicle affordability across all the various segments.”

The used vehicle market also experienced growing interest, with increased applications for pre-owned models.

“There is strong demand in the pre-owned segment, but many consumers seem to be testing affordability or exploring credit options without committing to purchases,” commented Thembinkosi Pantsi, vice-chairperson of NADA.

“The recent interest rate cuts may have encouraged some optimism, but many buyers are adopting a wait-and-see approach as they assess future rate movements.”

However, export sales plunged by 28.6% or 12 210 units to 30 431 units during the month compared to the 42 641 vehicles exported in the same month last year.

As the year-end approaches though, there is cautious optimism for a stronger December within the industry.

Brandon Cohen, chairperson of the National Automobile Dealers’ Association (NADA), said November marked another robust month for passenger car sales and there was hope that December would also not disappoint.

“November is traditionally challenging for the motor industry, as many consumers postpone purchases until January to benefit from new-year registrations or await year-end bonuses, typically paid in December,” Cohen said.

“Despite these factors, dealers have navigated the month with careful strategies, considering the competitive environment.”

The impact of October and November sales can certainly be felt in the market’s year-to-date performance in spite of the overall market remaining subdued, with year-to-date sales of 474 469 units, 3.5% lower than the same period in 2023.

“The market’s year-to-date performance remains the reality check for the industry,” said Lebo Gaoaketse, head of marketing and communication at WesBank.

“We continue to be on the slow path of recovery and whilst positive market growth for two months should be celebrated, cyclically softer December sales should be expected as consumers delay purchase decisions into the new year. However, the market remains primed for some stability during 2025 if October and November performances can be sustained.”

BUSINESS REPORT