November new-vehicle sales were the best in 20 months but talk of sustainable market recovery may be premature, WesBank marketing head Lebo Gaoaketse says.
Figures released on Monday by vehicle manufacturers’ and importers’ association Naamsa showed that 48,585 cars and commercial vehicles were sold last month.
That was 8.1% more than the 44,927 of November 2023. It was also the second month in a row that the market outsold the corresponding month of 2023, after an increase in October.
The November number was the highest since March 2023, when 50,114 vehicles were sold.
Brandon Cohen, chair of the National Automobile Dealers’ Association, described the November performance as “robust”. Naamsa wondered if it might signal the start of “a long-awaited upward trend”.
Sales this year are still fewer than in pre-Covid 2019. Even then, the market had been in decline for some years.
However, Gaoaketse said: “There is a lot more momentum to create before the country’s automotive industry can rest easier on a recovery path.”
The driving force behind last month’s overall market improvement was a 20% rise in new-car sales compared to November last year, from 29,252 to 35,101.
Under pressure
Sales of bakkies, minibuses, vans and trucks, however, remained under pressure.
Cohen observed that November’s growth was built on the back of demand from the car-rental industry, which accounted for 19.5% of sales.
Whether the rental sector can underpin long-term growth, is questionable.
Zeda CEO Ramasela Ganda told Business Day that SA rental fleets were unlikely to return to pre-Covid levels in the foreseeable future.
Ganda said Zeda’s fleet, which includes the Avis and Budget brands, was nearly 28,000-strong at its peak before the pandemic. Even with a predicted, sustained increase in demand, she expected little change to the current number of fewer than 22,000 vehicles in the short to medium term.
The reduced fleet had an average utilisation of about 71% in the year to September. The target was 75%.
Gaoaketse said consumer demand for cars actually declined in November. Not only was the average deal financed in November 6% lower than a year earlier, but the number of consumer applications “softened substantially”.
November’s car “splurge” means car sales this year now exceed those of 2023. At this stage last year, 319,850 had been sold. In 2024, the number is 321,565. The aggregate market for cars and commercial vehicles, though, is 3.5% in arrears — down from 491,513 to 474,469.
Naamsa predicted that further anticipated interest rate cuts in 2025 would support vehicle affordability, and that motor companies were optimistic about future business conditions.
Whether that optimism extends to vehicle exports, remains to be seen. November was yet another tough month for foreign shipments. They fell by 28.6% from a year earlier, from 42,641 to 30,431. For the first 11 months of this year, exports fell by 23.9%, from 372,505 to 283,454.
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