April’s 2.2% bump in new-vehicle sales proved to be an anomaly as new-vehicle sales again returned to negative territory in May, with the market down 14.2%, to 37 105 units, compared with the same month last year.
April’s positive blip followed eight months of market decline.
May 2024 sales were also 957 units, or 2.5%, down on April 2024 sales.
Asset financier WesBank says it appears as if South Africans voted with their feet during May, as they played it safe and kept a keen eye on the elections rather than showroom floors.
“The May sales hiatus shouldn’t have been unexpected,” says WesBank marketing and communication head Lebo Gaoaketse.
“There was a direct correlation between demand, as measured by finance applications, and sales volumes for May,” he adds.
“Applications for new-vehicle finance declined by double digits, while used vehicles maintained stronger interest.”
National Automobile Dealers’ Association chairperson Brandon Cohen echoes WesBank’s sentiment, noting that buyers were “very jittery in the run-up to the elections, leading to subdued activity”.
When looking at the various sales segments, figures released by Naamsa | the Automotive Business Council show that new passenger car sales were down 11.7% in May, to 24 367 units.
Light commercial vehicle (LCV) sales declined by 19.5%, to 10 334 units.
Medium truck sales decreased by 7.3% (to 533 units), and heavy truck and bus sales were 17.1% lower (to 1 871 units) compared with May last year.
WesBank says South Africa’s LCV segment has in recent times consistently out-performed the passenger car market, but believes that this dominance may be challenged by the proliferation of more affordable, value-packed entry-level sedans, hatchbacks and crossovers entering the market.
“While the politics play out during June, the new-vehicle market will hopefully be able to display more positivity during the second half of the year,” notes Gaoaketse.
“Economic conditions remain tough for consumers…Interest rates have once again been maintained at previous levels. But, although rates remain high, some analyst outlooks indicate that inflation has peaked, which could point to lower rates during the second half of the year.”
Another positive is the significant drop in fuel prices during June.
Cohen warns that the outcome of coalition talks post the elections will “materially affect our currency and other inflationary drivers, so we need to monitor this closely”.
New-vehicle export sales from South Africa declined by 19.1% in May, to 24 235 units.
Naamsa says vehicle exports continue to decline owing to sluggish global economic recovery.