Passenger vehicle sales had another successful month in November, surpassing October as the best sales month of the year.
According to the NAAMSA report released yesterday, December 2, total sales for November reached 48,585 units, with passenger cars taking the lead, showing a growth of 20%.
However, the overall market remains subdued, with year-to-date sales of 474,469 units, which are 3.5% lower than the same period in 2023.
Brandon Cohen, Chairperson of the National Automobile Dealers’ Association (NADA), noted that 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. “Despite these factors, dealers have navigated the month with careful strategies, considering the competitive environment,” Cohen added.
According to Cohen, the commercial vehicle market continues to reflect the economic challenges facing businesses. “Light commercial vehicle sales fell by 16.3% compared to November last year, although they are slightly up from October this year. Medium trucks dropped by 9.2%. Heavy trucks and buses performed slightly better, ending only 0.5% down year-on-year.
Thembinkosi Pantsi, Vice-Chairperson of NADA, said 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. “The used vehicle market has also seen 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 Pantsi.
Lebo Gaoaketse, Head of Marketing and Communication at WesBank, said there is still a lot of momentum to create before the country’s automotive industry can rest easier on a recovery path.
“Consumers remain under severe household budget constraints, displayed in two key pieces of WesBank data. The average deal size financed by the bank is 6% lower year-on-year for new vehicles, indicating affordability concerns amidst new car price inflation. In addition, despite sales being significantly higher than a year ago, demand as measured by applications has softened substantially. This may be the result of pent-up demand being satisfied and the reality of household income drying up,” says Gaoaketse.
By contrast, applications with WesBank for used vehicle finance are down half as much as new vehicles, while the value of these deals has increased marginally.
“Consumers have welcomed the second interest rate cut and will be hoping for the trend to continue,” says Gaoaketse.“In addition, the energy crisis is seemingly under control, inflation has been lower for five consecutive months, the currency is performing better, and fuel prices are contributing to budget savings—but all this positive impetus will take time to filter through to overall market performance and general consumer affordability,” says Gaoaketse.
“The market’s year-to-date performance remains a reality check for the industry,” says Gaoaketse. “We continue on the slow path of recovery, and while 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,” says Gaoaketse.
For a summary by WesBank of what happened in the motor industry in November, click on this video link https://youtu.be/4iC6ZhslztU
