New-vehicle sales began 2024 where they ended 2023. In the doldrums.
Figures released on Thursday by industry association Naamsa show that sales of new cars and commercial vehicles in January totalled 41,646. That was 3.8% fewer than the 43,294 of January 2022 — and the sixth successive month that monthly sales have lagged those of a year earlier.
Cars were once again the biggest disappointment; sales of 28,790 were 6.7% below the previous January’s 30,863.
Vehicle exports, having set an record in 2023, also started 2024 on a weak note. At 20,242, they were 2.1% down from the previous corresponding period 20,684.
Naamsa CEO Mikel Mabasa warned of an “uncertain” environment for exports.
Besides SA, the UK and US are among several nations due to hold national elections in 2024. Sluggish global growth and geopolitical tension could also affect demand.
“The global economy is expected to remain weak in 2024 but inflation is easing and interest-rate cuts in major markets may be on the cards in the second half of the year, which would support the SA automotive industry’s export performance,” Mabasa said.
Locally, optimism is harder to find. Last week, Toyota SA Motors president Andrew Kirby forecast full-year market growth of only 1.5% in 2024 — most of it coming in the second half of the year.
Mabasa expected the same. He said a potential interest-rate cutting cycle in that period, accompanied by easing core and food inflation and improvements in the country’s energy and logistics infrastructure “could provide a much-needed relief for consumers and subsequently stir up some momentum in the new-vehicle market”.
On Wednesday, UD Trucks marketing director Rory Schulz predicted virtually no market growth for heavy and extra-heavy trucks, which enjoyed 10.8% and 15.5% sales booms, respectively, in 2023 as Transnet’s failure to offer a reliable rail freight service caused a big swing to demand for road transport.
In an interview, Schulz said that further significant sales to meet that growth were unlikely. “We’ve caught up to where we need to be and that’s why I think the truck market will be flat in 2024.” He expected a similar picture for medium-sized trucks.
Brandon Cohen, chair of the National Automobile Dealers’ Association, forecast “a complex tapestry of economic and geopolitical uncertainties, each thread woven with 'what-if”' scenarios that could significantly influence SA's automotive landscape” in 2024. These included oil prices, currency fluctuations, the national elections, and “global political dynamics”.
Mabasa was less poetic: “The lingering effects of cost-of-living increases, dampened consumer and business confidence, combined with the country’s port challenges and persistent load-shedding continue to undermine the new vehicle market’s recovery path.
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