Local vehicle sales experienced a slightly uptick in April 2024, but May reaffirmed that the new-vehicle market in South Africa is still slowing down. Industry experts say that pre-election jitters are a cause for this contraction, but various other factors also contribute to shrinking overall sales volumes.
Total new-vehicle sales in South Africa in May 2024 were down 14.2% on the numbers registered in the same month last year, with a substantial drop of 6 137 units year-on-year. Not only were May 2024’s sales figures lower than the previous year’s, but May also saw a reduction in comparison to April’s sales numbers, and contributed to a year-to-date (YTD) drop of 6.4% in comparison to the same timespan in 2023.
Both passenger- and commercial vehicles were impacted by the contracting market, with only heavy commercial vehicles and busses showing a slight YTD improvement of 0.9% compared to a year ago. Some bad news were found in the foreign trade department as well, where exported passenger cars and LCVs registered volume decreases of 16.8% and 22.5%, respectively.
What is causing the new-vehicle sales slump?
According to the naamsa industry report for May 2024, customer uncertainty preceding the recent national elections played a significant part in this month’s sales decline. However, it is likely that lower consumer confidence is only part of the picture, because continuing high inflation and its attendant elevated interest rate certainly also influenced this sales slump.
Combine that with higher cost of living all round, and it’s understandable that such a confluence of market factors would depress transactions around big-ticket items such as cars and fixed property. Similarly, lower world-wide market demand had the same influence on our export activity as much as South African economic factors affected local sales figures.
Top brands in May 2024 new-vehicle sales
Toyota continues its unbroken run as top-selling vehicle brand in South Africa, with 11 042 total new vehicles sold across all segments. 8 529 of those sales were passenger cars, bakkies, and SUVs sold in the local market, with only about 20% of its total number being exported and the balance comprising medium- and heavy commercial vehicle sales. This marks an increase of about 200 units in local sales compared to April 2024, indicating sustained demand for Toyota’s proven products in an uncertain marketplace.
Volkswagen slotted back into second place with local passenger vehicle- and LCV sales amounting to 4 893 units. VWSA is also the second-largest exporter of new vehicles, with more than half of its total figures originating in the export arena. Where the Hilux produced the bulk of Toyota’s sales volume, VWSA has to rely on the evergreen Polo Vivo to sustain demand, however, as their Amarok LCV is currently a fringe player at the top end of its segment and doesn’t really cater for the workhorse market yet.
Get more details about VW’s big plans for Africa, and gain insight into its export programme here.
Suzuki slipped one position to third place overall, registering 4 101 total sales in May as opposed to 4 891 in April 2024. This is most likely due to stock shortages, though, and Suzuki Auto SA has already announced its intention to obtain larger consignments of new vehicles for local consumption. We expect this brand’s relentless march up the popularity ranks to continue in due dourse.
Fourth-placed Ford South Africa also gained some ground in local sales, with its total volume increasing by 255 units. This is likely on the back of the recently-released new Territory SUV, which bolsters Ford’s presence outside the Ranger/Everest realm. The Silverton plant exported fewer Rangers than in April, however, dropping about a thousand units in this area in comparison to April’s export volume.
Hyundai rounds out the top 5 brands again, registering 66 more new vehicles in May than in April 2024. This proves the combined value of a proven reputation and a wide product spread - the company hasn’t launched anything new in almost a year, but the vehicles they do offer are still competitive in an increasingly hostile marketplace.
Isuzu deserves a special mention, too, because it managed to move 127 more units than in April, giving them a total sales figure of 1 954 units (including medium- and heavy commercial vehicles). Of this number, 1 282 units were of the D-Max while 328 vehicles were exported. This shows that the mu-X SUV is proving quite sought-after, racking up 344 individual sales. Against formidable and popular opponents such as the Fortuner and Everest, this is a commendable performance.
Find out more about the entry-level Isuzu mu-X in our review here.
Are Chinese brands losing some momentum?
May 2024’s sales figures produced a surprise result for the Chinese contingent, however, because both Chery and GWM registered fewer sales than in April. GWM held somewhat steady, only losing 288 sales compared to the previous month, mainly because P-Series sales suffered a 44.3% decline. This indicates that their SUVs are as popular as ever, but doesn’t explain why the P-Series lost so many customers.
The same applies to Chery, but even more so. From a record-breaking 2 009 total sales in April, Chery suffered a 400-unit drop in May. This is despite the arrival of a DCT-equipped Tiggo 4 Pro and the hot-shot Tiggo 8 Pro Max AWD, along with the well-received Jaecoo J7 and Omoda C5, all of which should have bolstered sales. We’ll keep a close on developments to see whether this sales knock is just an aberration peculiar to one particular month, or an indication that our fledgling love affair with this versatile Chinese brand is simmering out.
Should legacy automakers be concerned about the rising popularity of Chinese SUVs?
Martin Pretorius
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