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Picture: 123RF/APRIOR
Picture: 123RF/APRIOR

After months of resisting increasingly negative economic circumstances, the new-vehicle market has finally buckled under the pressure, Brandon Cohen, chair of the National Automobile Dealers’ Association (Nada), said at the weekend. 

WesBank marketing head Lebo Gaoaketse said the market slump could continue into 2024. “The consideration will now be whether the new-vehicle market can show any growth at all in 2024,” he said. 

Cohen and Gaoaketse were speaking after industry association Naamsa reported that sales of new cars and commercial vehicles recorded their fourth successive year-on-year decline in November. 

Figures released on Friday showed that 45,075 vehicles were sold in November. That was 9.8% fewer than in November 2022. After 11 months of 2023, aggregate sales of 491,987 were a mere 0.8% ahead of the same stage in 2022. At the end of October, the year-on-year gap was 2.1%. 

As a result, it is no longer guaranteed that full-year 2023 sales will finally return to pre-Covid levels. In 2019, the market was 536,612, before collapsing to 390,206 a year later. This recovered to 529,562 in 2022 and, until very recently, it was assumed that 2023 would comfortably outsell 2019. 

Cohen said sales “have finally yielded to the pressures of a depressed economic environment”. Even generous buyer incentives from dealers and vehicle manufacturers couldn’t turn the tide.

All market sectors were affected in November. Car sales were down 12.1% from the corresponding month of 2022, light commercials fell 3.9%, medium commercials 13.5%, heavies 19.1%, extra-heavies 6.5% and buses 7.6% 

The Reserve Bank’s decision to hold back further interest rate rises in November was welcome, said Gaoaketse, but “the high lending rate, combined with high inflation and relatively lower household income, will continue to restrict big-ticket purchases such as new vehicles”. He added that this could continue until the middle of 2024. 

In addition to the usual sociopolitical headwinds facing consumers, the return to high levels of load-shedding was also hurting their willingness to spend. “Sales during December and January could be expected to experience a higher-than-usual wait-and-see approach to purchase decisions,” said Gaoaketse. 

Naamsa CEO Mikel Mabasa said load-shedding, plus Transnet’s inability to provide reliable port and rail operations for vehicles and components, had hindered new-vehicle sales in November. Some vehicle manufacturers had been forced to reduce production, while dealers could not guarantee delivery dates. 

Mabasa said: “Logistical challenges at the country’s ports and across the entire freight rail network ... are impacting negatively on the vehicle production landscape and on new-vehicle sales in SA. The current challenges will soon have a devastating domino impact on the entire auto value chain.” 

The local market may be miserable but exports continue to grow. In November, the motor industry exported 41,660 vehicles — 25.5% more than a year earlier. To the end of November, aggregate exports totalled 370,284, which was 13.8% more than at the same stage of 2022.

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