Soft September new vehicle sales sign of weaker auto market

New vehicle sales in September 2024 (44 325 units) were 4.3% down on September 2023, according to naamsa, and Lightstone stands by its earlier forecast that sales in 2024 will drop by between 2.8% and 3.2% from 2023’s numbers.

While September’s sales were 0.7% up on August 2024, the weakness in the market and uncertainty in the domestic economy follows the national elections at the end of May and interest rates sitting at a 15-year high for most of 2024.

Passenger vehicle sales climbed 1.8% year-on-year in September to 30 162 units, but Light Commercial Vehicle sales fell by 17.1%, reaching
10 924 units, when compared with September 2023.

New vehicle sales

Overall sales for the first nine months of 2024 were 5.8% lower than for 2023, and 3.5% below sales for the same window in 2022. naamsa reported 377 882 units sold between January and September, of which around 83.5% represented dealer sales.

Passenger vehicle sales were down 3.3% year-on-year for the nine months and sales of LCVs declined 11.6% compared to 2023. The car rental industry accounted for around 13.5% of new Passenger car sales in the January-September window, matching the 13.5% share in the 2022 window, and up on the 13.1% in 2023.

January to September – Passenger and Light Commercial new vehicle sales

Lightstone does not anticipate the market to grow in 2024. Continued pressures remain throughout the macro economic 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.

However, good news for auto sales, the South African Reserve Bank cut interest rates by 25 basis points in September.

Anticipated new vehicle sales for 2024 sit at around 515 900 units, of which 483 800 are Light Vehicles (Passenger and Light Commercial). Overall, Lightstone expects new vehicle sales to shrink by 3% in 2024.

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, and weakest third quarter since 2021.

New vehicle sales – 2019 to 2024

Market observations - bodyshape

The best-selling Light Vehicle (Passenger & LCV markets) bodyshape in South Africa for the first nine months of 2024 is the Crossover/SUV bodyshape (which includes the Chery Tiggo 4 Pro, Haval Jolion and Toyota Corolla Cross) with 132 854 new units sold (87.2% were dealer sales, and 8.1% reported through the rental channel).

Sales in this category decreased by 0.2% compared to the same period in 2023, although its 37.4% share of all Light Vehicle sales from January to September was an increase from the 35.3% recorded during the same period 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
90 548 units sold between January and September. As with the Crossover/SUV bodyshape sales were down, by 6.2%, 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 19.7% year-on-year in the January-September period from 2023, which in turn was 51.6% 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, although it is not one of the bigger segments. Over the first nine months of 2024, the Panel Van bodyshape made up 1.2% of all Light Vehicle sales, up from 1% market share in 2023.

The second most improved bodyshape for year-on-year growth over the first nine months of 2024 was the Extended Cab Pick-Up bodyshape (Ford Ranger, Isuzu D-Max and Toyota Hilux), with sales climbing 14.2% from a year earlier.

Light vehicle bodyshapes – share of Light Vehicle market (January to September)

Hybrid and Electric vehicle sales

Growth in new Hybrid & Electric Passenger vehicle sales (which includes Traditional Hybrid, Plug-in Hybrid and Battery Electric vehicles) for the first nine months of 2024 was 109%, at 10 948 units, on 2023, which in turn had jumped 69% from 2022. The full Passenger Market share for these vehicles was 4.3% for the first nine months of 2024.

January to September – Hybrid and Electric Vehicle share of Passenger sales

Traditional Hybrid vehicles contributed 86% of the sales of the sub-segment over the first nine 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 3% year-on-year (y-o-y) in August 2024, a seventh successive month where new vehicle price inflation has come in below Headline CPI (as released by StatsSA – August = 4.4%). The August 2024 number was also lower than the July y-o-y increase of 3.7%. On a monthly basis, August prices rose 1% from July, which in turn was 0.4% up on June.

Lightstone’s new Light Vehicle Price Inflation vs Headline Consumer Price Inflation

Used Passenger Vehicle inflation y-o-y for 2-year-old vehicles was -1.8% at the end of September (meaning that, on average, a 2-year-old Passenger car was retaining 1.8% less of its original value in September 2024 than a 2-year-old car was a year ago). This is marginally higher than in August 2024 (-1.9%), but lower than in September 2023 (-0.2%).

For 4-year-old vehicles, inflation was running at -2.7% y-o-y in September, unchanged from August and lower than the -0.1% in September last year. A 6-year-old Passenger vehicle was retaining 2.6% less of its value in September 2024 than in September 2023. This was unchanged from the August figure, but down on the September 2023 inflation which was +0.5% y-o-y.