South African Vehicle Market Faces Decline Amid External Pressure

The South African vehicle market is under immense pressure with aggregate new vehicle sales dropping by 4.1% year on year in September, primarily due to significant external business influences. This latest data provided by the Automotive Business Council highlights the increasing vulnerability of the automotive industry.

Exports have been significantly hit, recording a steep 12.6% decline. A substantial 8.4% drop was also registered in new passenger car sales. The industry CEO, Mikel Mabasa attributed the drastic drop to various external pressures such as rising fuel prices, logistical issues in transportation, frequent power blackouts, and volatile commodity prices.

Notwithstanding these obstacles, Mabasa pointed out a silver lining - the industry has shown remarkable resilience in terms of year-to-date sales and export performance, which has grown 8.3%. This uptick, he explained, could be due to relatively low production volumes, a result of the impact of the 2022 floods.

In comparison to the previous year, vehicle exports for the year to date are now 8.3% ahead, amounting to a total of 285,200 units. However, Mikel pointed to a persisting concern looming over the sector – consumer affordability. This comes even as the South African Reserve Bank (SARB) held the repurchase rate steady at 8.25% in September 2023.

In an effort to address the ongoing challenges and explore potential strategies, the Automotive Business Council will host the South African Automotive Week from 11-13 October 2023 in Midrand.