Johannesburg, 3 July 2023: “A consistent stream of new and updated models, particularly in significant high-volume segments, along with improved availability of popular models, appeared to be crucial factors in sustaining the growth trajectory of new vehicle sales in South Africa,” commented Gary McCraw, Director of the National Automobile Dealers’ Association (NADA), after studying the June retail sales figures distributed by naamsa today.
McCraw highlighted that another positive aspect that influenced the market was the enhanced supply of new vehicles, which fostered competition among various brands. Furthermore, buyers, many of whom had been waiting for their new vehicles for quite some time, benefited from numerous aggressive sales assistance programmes.
“It is indeed pleasing to observe that the total market reached 46,810 units in June, representing a remarkable 14% increase compared to the same month last year. However, it is important to note that a year ago, the Toyota plant in Durban was incapacitated due to flood damage, which had an impact on overall sales volume.
“Nevertheless, witnessing continued growth in the current challenging economic environment is encouraging, given that vehicle buyers are facing affordability pressures, a depreciating Rand that drives prices higher, low business confidence, and political instability. Fortunately, consumer inflation slowed to 6.8% in April, marking the lowest rate since May 2022. Additionally, the decreased frequency of power outages has provided a morale boost,”added McCraw.
Dealers accounted for a slightly smaller share of the retail market than usual, at 83.5%, while rental sales played a significant role, comprising 10% of total sales and 13.4% of the passenger car market, indicating good activity in the car rental space as the fleets start to grow for the July and December holiday seasons. Government sales represented 3.5% of the total, and sales to corporate fleets accounted for 3%.
NADA finds it gratifying to observe growth across all market segments, as well as overall growth. Passenger car sales experienced a modest increase of 0.8%, which is still a positive development.
“Meanwhile, sales in the buoyant light commercial vehicle segment surged by 57.1%, with Toyota being the major contributor. Medium truck sales rose by 8.2%, and heavy trucks and buses reported a substantial increase of 19.6%,” said McCraw.
“Generally, sentiment towards making major purchases remains slightly negative in South Africa, as consumers grapple with the effects of high interest rates. Looking ahead, if we can maintain the current rate of power outages, continue to experience a drop in inflation, and benefit from the recent relief in petrol prices, sentiment may gradually improve. This, in turn, could lead to increased dealer sales as more new models become available and, hopefully, sales assistance persists,” concluded the NADA Director.
NADA is a proud constituent association of the Retail Motor Industry Organisation (RMI).