New vehicle sales were up 24,3% in September to 54 700 units, by some margin (2 820 units) the highest-selling month so far this year. It was also the third consecutive month of volumes above 50 000 units and rounded out 12 months of continual growth for the new vehicle market.
“A more favourable economic outlook should continue to support increased new vehicle sales,” says Lebo Gaoaketse, head of marketing and communication at WesBank.
Stability in fuel prices with only marginal shifts expected this month, improved performance of the currency, and the decision to maintain interest rates all contribute to consumer and business confidence.
The turnaround of the national power utility with profits promised to be reinvested in energy infrastructure will also provide a more positive outlook for the economy in a more stable electricity environment.
But household budgets remain strained and affordability remains the key consideration in purchase decisions. “Levels of demand are unprecedented with September having the highest volumes of applications for finance,” says Gaoaketse, cautioning that the market dynamics have changed and acknowledging that wider-spread applications to provide greater choice for consumers is more prevalent than in the past.
“Ten years ago, with a new vehicle sales volume of 55 315 units (September 2015), WesBank had 28% fewer applications for finance displaying increased competition for credit.” At the time, the repo rate was 6%.
The passenger car segment grew 28% to 38 603 cars, while Light Commercial Vehicles (LCV) increased 19,7% to breach the 13 000-unit volume at 13 078 units. Recent reports have indicated a trend for recreational double cabs as a replacement for premium sedans, driving segment growth. A significant 8 330 units, up 24,9% year-on-year from the rental market also contributed to overall growth.
September’s stellar performance has driven year-to-date sales up 15,6% to 436 854 making the 500 000-unit annual sales ceiling easily breakable should the trajectory continue.
“It is interesting to note the shifts in the market from 10 years ago within a similar volume,” says Gaoaketse. “In a slightly lower interest rate environment, much more disposable income provided consumers the opportunity to replace their vehicles much more often. South Africa’s new vehicle market is selling similar volumes in an environment where consumers are holding onto their cars for longer. That must be a positive sign for future growth.”
Speaking at naamsa’s 2025 SA Auto Week conference, newly appointed WesBank CEO Robert Gwerengwe underscored the critical need for industry collaboration to propel the local automotive sector past the persistent 500 000-unit annual sales ceiling.
“Collaboration is key to advancing the industry beyond its current levels, and naamsa deserves immense credit for its role in bringing together industry stakeholders and even competing brands to solve for South Africa’s mobility challenges and chart a sustainable growth path,” says Gwerengwe. “A vibrant automotive sector provides South Africans access to a reliable and convenient means to go to work or school, or anywhere they need to be to pursue their economic empowerment goals.”
Gwerengwe calls for greater collaboration amongst industry players, urging all stakeholders to put ‘SA Inc’ first when devising future plans to ensure a collective win for individual companies, the industry, and the country.
“Confidence and sentiment are both looking good for South Africa’s vehicle market – both new and used,” comments Brandon Cohen, chairperson of the National Automobile Dealers’ Association (NADA). “We certainly noticed good dealer activity in September. Some brands absolutely shot the lights out, while others struggled a little reflecting the overall performance of the new vehicle market.”
NADA indicated more positive signs for dealer activity and the continued demand for new vehicles within a renewed optimism in the country. “The 1c per litre rise in petrol price is positive for October and we know the last CPI at 3,3% was very good and right near the 3% unofficial target of the South African Reserve Bank,” says Cohen. “US dollar weakness is helping the rand, which will contribute to new vehicle pricing stability for some time to come.”
Improving overall economic sentiment, Cohen notes the continued developments at Transnet, impacting stock delivery to dealers across the country, while combatting costs and therefore helping reduce overheads. “These improvements in national infrastructure not only provide efficiency to dealers but improve service to customers from a vehicle and parts availability perspective, never mind the reduction of road activity impacting road conditions and traffic.”
An additional national improvement is the reduction of the drivers’ licence backlog by over half, which impacts access to finance and insurance during purchase considerations and ownership.
“Access to additional funds through the Two-Pot Retirement System has contributed to some households becoming credit-worthy again,” says NADA vice-chairperson Thembinkosi Pantsi. “While accessing savings should be carefully considered with the help of professional advisors, it is clear that overall budgets remain strained and are impacting affordability.”
Business confidence over the remainder of the year will be crucial for sustainability. With increases in Heavy Commercials (up 18%) and Buses (up 60,5%) weighed against small declines in Medium (-1,9%) and Extra-Heavy trucks (down 1,5% but the largest commercial vehicle volume), there is good potential for continued growth in the last quarter.
“While demand clearly exists, affordability continues to constrain the new vehicle market, forcing many motorists into pre-owned showrooms in search of better value,” says Cohen. “While this remains good business for dealers, it ultimately impacts new vehicle sales and their slow recovery to pre-COVID levels. It does, however, maintain mobility for South Africans at an affordable price point.”
NADA director Ashley Samuel notes an easing environment for consumers where cheaper inflation, a stronger rand, and more competitive car prices were making buying easier. “Although high interest rates and weak job growth are still making it harder for people to buy more expensive cars, the market is proving resilient and continues to boost the economy.”