New vehicle sales show signs of resilience

New vehicle sales in July 2024 (44 325 units) were 1.7% up on July 2023, according to naamsa, and 11.2% more than June 2024. The relative strength in July follows a period of uncertainty in the domestic economy surrounding the national elections at the end of May, but Lightstone still expects 2024 sales to drop by between 2.5% and 3% from 2023.

Passenger vehicle sales jumped by 7.2% year-on-year in July to 30 048 units, but Light Commercial Vehicles sales fell by 8.8%, reaching 11 556 units, when compared with July 2023.

New vehicle sales

Overall sales for the seven months of 2024 were 6.2% lower than for 2023, and 2.1% below sales for the same window in 2022. naamsa reported 290 074 units sold between January and July, of which around 84.6% represented dealer sales. Passenger vehicle sales were down 5% year-on-year for the seven months and sales of LCVs declined 9.3% compared to 2023. The car rental industry accounted for around 11.8% of new Passenger car sales in the January-July window, matching the 11.8% share in the 2023 window, but down on the 12.9% share in 2022.

January to July - Passenger and Light Commercial new vehicle sales

We do not anticipate the market to grow in 2024. Continued pressures remain throughout the macroeconomic environment, with GDP expected to grow at just 1%. The Rand is holding reasonably steady against major global currencies and headline consumer inflation is expected to remain within the Reserve Bank’s 3% - 6% target range. There is the possibility of an interest rate cut by the Reserve Bank later in the year.

Anticipated new vehicle sales for 2024 sit at around 518 100 units, of which 485 800 are Light Vehicles (Passenger and Light Commercial). Overall, growth in new vehicle sales is expected to end 2024 in the region of -2.6%. This is lower than the 0.5% growth in new vehicle sales in 2023, and comes on the back of the worst quarterly sales volume performance in three years in Q2.

New vehicle sales - 2018 to 2024

Market observations - bodyshape

The Crossover/SUV bodyshape (which includes the Chery Tiggo 4 Pro, Haval Jolion and Toyota Corolla Cross) was the best-selling Light Vehicle (Passenger and LCV markets) bodyshape in South Africa in the first seven months of 2024, with 99 559 new units sold (88.2% were Dealer sales, and 7.2% reported through the Rental channel).

However, sales in this category were down 3.5% from the same window in 2023, although its share of 36.5% of all Light Vehicle sales for the January-July window was slightly more than 35.4% recorded for the same timeframe in 2023.

The second-best performing bodyshape in terms of volume was the Hatch (which includes Suzuki Swift, Toyota Starlet and VW Polo Vivo) with 71 375 units sold between January and July. As with the Crossover/SUV bodyshape, sales were down 4.4% compared to the same window in 2023.

Sales for the Panel Van bodyshape, which includes the Suzuki Eeco, Toyota Quantum and Volkswagen Caddy, picked up 23.4% year-on-year in the January-July period from 2023, which in turn was 48.6% up on this bodyshape’s total for 2022. This makes the Panel Van bodyshape the best performing Light Vehicle segment in terms of sales growth, despite not being one of the bigger segments. Over the first seven months of 2024, the Panel Van bodyshape made up 1.2% of all Light Vehicle sales, up from 0.9% market share in 2023.

The second most improved bodyshape for year-on-year growth over the first seven months of 2024 was the Extended Cab Pick-Up bodyshape (Ford Ranger, Isuzu D-Max and Toyota Hilux), with sales climbing 18% from a year earlier.

Light Vehicle bodyshapes - share of Light Vehicle market (January to July)

Hybrid & Electric vehicle sales

New Hybrid & Electric Passenger vehicle sales (which includes Traditional Hybrid, Plug-in Hybrid and Battery Electric vehicles) for the first seven months of 2024 was 121% at 8 306 units on 2023, which in turn had jumped 60% from 2022. The full Passenger Market share for these vehicles was 4.3% for the first seven months of 2024.

January to July – Hybrid & Electric Vehicle share of Passenger sales

Traditional Hybrid vehicles contributed 86% of the sales of the sub-segment over the first seven months of 2024, with Battery Electric vehicles making up 10% of sales and Plug-in Hybrid vehicles responsible for 4%.

Vehicle price inflation

New Light Vehicle price inflation in South Africa rose 4.1% year-on-year (y-o-y) in June 2024, the fifth successive month where new vehicle price inflation has come in below Headline CPI (as released by StatsSA – June = 5.1%). The June 2024 number was also lower than the May y-o-y increase of 4.5%. On a monthly basis, June prices dropped 1.9% from May, which in turn was 3.1% up on April.

Lightstone's New Light Vehicle price inflation vs Headline Consumer Price Inflation

Used Passenger Vehicle inflation y-o-y for two-year-old vehicles was -2% at the end of July (meaning that, on average, a two-year-old Passenger car was retaining 2% less of its original value in July 2024 than a two-year old car was retaining a year ago). This is marginally higher than in June 2024 (-2.1%), but a fair bit lower than in July 2023 (+0.8%). For 4-year-old vehicles, inflation was running at -2.9% y-o-y in July, versus -3.1% in June and +1.5% in July last year, while for 6-year-old Passenger vehicles, July’s inflation was -2.8%, compared to -3% in June 2024 and +2.3% in July 2023.