2024 in Review: A Year of Challenges and Shifting Trends
The new vehicle market in South Africa has remained intricately tied to the country’s broader economic conditions. Despite some promising signs in late 2024, the industry faced another tough year. While the last quarter showed signs of recovery, the year’s overall performance lagged behind 2023, with total new vehicle sales declining by 3% to 515,712 units. This is still below the pre-pandemic benchmark of 536,612 units achieved in 2019, highlighting the ongoing struggles of the sector.
December 2024 Sales Performance
December marked the third consecutive month of year-on-year growth, with 41,273 vehicles sold, a modest increase of 2.5% compared to December 2023.
- Passenger Cars: Up by 8.2%, reflecting strong consumer demand in this segment.
- Light Commercial Vehicles: A steep decline of 10.3%, mirroring challenges faced by small businesses and logistics operators.
- Medium Commercial Vehicles: Grew by 7.6%, driven by steady demand from niche sectors.
- Heavy Trucks and Buses: Fell by 11.8%, indicating ongoing constraints in heavy transport industries.
Vehicle exports, however, continued to struggle, declining by 4.3% year-on-year to 25,931 units in December.
Annual Sales Trends
New entrants, particularly Chinese brands, disrupted the market by offering more affordable options, catering to consumers under economic strain. The domestic market saw slight growth in passenger car sales (+1.1%), but other segments such as light commercial vehicles (-12.0%) and heavy trucks and buses (-4.9%) dragged overall figures down.
Exports also saw a significant decline, dropping by 22.8% to 308,380 units in 2024. This was the first decline in vehicle exports since the pandemic-affected year of 2020. Contributing factors included reduced demand in key export markets like the EU, stricter emissions regulations, and competition from electric vehicle imports.
Industry Prospects for 2025: A Glimmer of Hope
Domestic Market Outlook
Several positive economic indicators suggest that 2025 could be a year of recovery for South Africa’s automotive industry.
- Interest Rate Cuts: The South African Reserve Bank implemented two rate cuts at the end of 2024, easing pressure on consumers. Further cuts in 2025 could enhance vehicle affordability.
- Fuel Prices: Lower fuel prices have boosted disposable income, providing additional support for vehicle purchases.
- Improved Consumer Confidence: An anticipated GDP growth of 1.5% in 2025, coupled with ongoing economic reforms, could drive a single-digit improvement in new vehicle sales compared to 2024.
Global Considerations
While geopolitical risks and trade tensions may influence export performance, easing monetary policies in key export regions could positively impact South African vehicle exports over the medium term.
A Milestone Year for the Industry
As the domestic automotive industry celebrated 100 years of vehicle manufacturing in 2024, 2025 marks the 90th anniversary of naamsa. This milestone underscores the resilience and adaptability of South Africa’s automotive sector amid global and local challenges.
Conclusion
While 2024 was marked by economic headwinds, market disruptions, and declining exports, the stage is set for a potential rebound in 2025. With easing economic pressures and resilient domestic demand, the automotive industry looks forward to a year of recovery and growth.
Best wishes to all industry stakeholders for a successful 2025!
Read more about where the future of SA car makers is headed
