We’ve summarised the BUSA insights that we feel could influence South Africa’s automotive market
1. Repo Rate Cut
● Impact: A reduction in the repo rate to 7.75% will likely lower borrowing costs for consumers, making vehicle financing more affordable. This could boost demand for new and used vehicles.
2. Rising Business Confidence Index (BCI)
● Impact: The BCI increase to 45 in Q4 reflects improved sentiment among businesses, which could drive fleet expansions and commercial vehicle sales.
3. Easing Consumer Inflation
● Impact: Lower inflation (2.8% y/y in October) increases consumers’ purchasing power, potentially encouraging discretionary spending, including automotive purchases.
4. Rising Business Confidence Index (BCI)
● Impact: The BCI increase to 45 in Q4 reflects improved sentiment among businesses, which could drive fleet expansions and commercial vehicle sales.
5. Growth in Retail Trade Sales
● Impact: A rise in real retail trade sales by 0.7% q/q suggests an uptick in consumer activity, which might correlate with higher vehicle purchases, especially in urban areas.
6. Decline in Motor Trade Sales
● Impact: A 0.6% q/q decline in real motor trade sales in Q3 indicates a current slowdown in the automotive sector, potentially due to tighter consumer budgets or reduced availability of new vehicles.
7. Decline in Trade Activity Index (TAI)
● Impact: The drop in SACCI’s TAI to 29 in October suggests reduced business activity, which could indirectly suppress demand for commercial vehicles.
8. Increase in EU Car Registrations
● Impact: A 1.1% rise in EU car registrations in October signals improving global automotive demand, which could have a positive knock-on effect on South African exports or investor confidence in the sector.
