“Brands and dealerships are currently offering enticing incentives to prospective buyers, but it is anticipated that only once the interest rate cutting cycle commences, likely during the second half of the year, along with easing inflation, some upward momentum would be sparked in the new vehicle market.”
The National Automobile Dealers' Association (Nada) says economic pressure and political uncertainty continue to impede growth.
“The market faced headwinds from the recent fuel price increase and anticipation of another hike next week,” said Nada chair Brandon Cohen.
“We observe a trend of consumers downsizing and conducting extensive research into pricing and financing options. Affordability remains a crucial factor in purchasing decisions. South Africans are increasingly turning to more budget-friendly vehicles due to economic challenges, high interest rates, and escalating fuel costs,” Cohen said.
Statistics from Naamsa highlight a shift towards Chinese-manufactured vehicles, driven by competitive pricing, quality, and hi-tech specifications.
This trend is reshaping the competitive landscape, posing challenges for traditional premium dealerships, said Cohen.
These were South Africa’s top-selling car brands in a muted February
The premium segment is under pressure, with customers shifting from new vehicles to demos and pre-owned cars
Image: Supplied
New-vehicle sales in February continued a downward trend caused by adverse economic conditions affecting consumers.
The 44,749 units sold in South Africa last month declined 0.9% compared to February 2023, with the passenger car segment performing the worst with a 3.1% decline to 28,857 units, with sales of light commercials and bakkies registering a 2.5% rise to 13,306 units.
The persisting economic strain remains a concern for household income and the weak new-vehicle market reflects that middle-income households are restricting big financial commitments for items such as vehicles at present, says motor industry body Naamsa.
“The ripple effect of higher interest rates, higher fuel prices and no relief for personal income taxpayers in the 2024/2025 tax year would continue to impact household incomes for the foreseeable future,” says Naamsa CEO Mikel Mabasa.
“With the date of the 2024 South African general election announced to take place on May 29, economic uncertainty remains the reality for most households and businesses.
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“Brands and dealerships are currently offering enticing incentives to prospective buyers, but it is anticipated that only once the interest rate cutting cycle commences, likely during the second half of the year, along with easing inflation, some upward momentum would be sparked in the new vehicle market.”
The National Automobile Dealers' Association (Nada) says economic pressure and political uncertainty continue to impede growth.
“The market faced headwinds from the recent fuel price increase and anticipation of another hike next week,” said Nada chair Brandon Cohen.
“We observe a trend of consumers downsizing and conducting extensive research into pricing and financing options. Affordability remains a crucial factor in purchasing decisions. South Africans are increasingly turning to more budget-friendly vehicles due to economic challenges, high interest rates, and escalating fuel costs,” Cohen said.
Statistics from Naamsa highlight a shift towards Chinese-manufactured vehicles, driven by competitive pricing, quality, and hi-tech specifications.
This trend is reshaping the competitive landscape, posing challenges for traditional premium dealerships, said Cohen.
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“The premium segment is under pressure, with customers shifting from new vehicles to demos and pre-owned cars. Some loyal premium brand customers extend maintenance plans, but the majority are either buying down, waiting or transitioning to pre-owned vehicles, leading to significant growth in the pre-owned car market compared to new cars.”
Toyota retained its dominant market leadership as Mzansi’s favourite brand in February, ahead of Volkswagen and Suzuki.
TOP 15 SELLING BRANDS IN FEBRUARY 2024
* Source: Naamsa
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