Total new-vehicle sales in July inched up by 1.5%, to 44 229 units, compared with the same month last year, driven by an improvement in the passenger-car market.

July were only the second month, after April, to show any sales growth since July last year.

The new-passenger-car market reached 29 934 units in July, a gain of 6.8% compared with the same month last year.

The car rental market accounted for 17.1% of new-passenger vehicles sales during the month.

Sales of new bakkies, vans and minibus taxis – light commercial vehicles – dropped by 8.8%, to 11 554 units.

More bad news is that July medium-truck sales declined by 6.6%, reaching 641 units, while heavy-truck and bus sales dropped 3.7%, to 2 100 units.

Export sales, at 25 461 units, also had a negative month, with a decline of 33.2% compared with the same month last year.

Year-to-date new-vehicle sales in the domestic market are down 6.3% compared with the same seven months last year.

Year-to-date exports are down 13.5%.

Naamsa | The Automotive Business Council says “the welcome uptick” in last month’s numbers could be a turning point, potentially signalling an improved performance for the rest of the year.

“Encouraging aspects for growth and increased consumer spending for the balance of the year include four consecutive months of no loadshedding, a stronger exchange rate, and potentially up to two interest rate cuts before year-end.”

Exports have been impacted by adverse weather conditions, as well as declining sales to Europe, the South African automotive industry’s top export region.

The Eurozone’s GDP grew by a marginal 0.3% during the second quarter of this year, with Germany’s GDP contracting by 0.1%, notes Naamsa.

Finally…
“Finally, in July, we witnessed a positive shift in monthly retail new-vehicle sales,” says National Automobile Dealers Association chairperson Brandon Cohen.

“Although the increase was modest…the sale of 44 229 units is encouraging.”

“Consumers are beginning to visit dealerships more frequently,” notes Cohen.

“Confidence in the country and overall sentiment are improving, leading people to gradually return to car purchases.

“However, high interest rates and the unsustainably high cost of living continue to impact vehicle finance accessibility. While there is a clear desire for vehicles, affordability remains a significant barrier.”

WesBank marketing and communication head Lebo Gaoaketse warns that while soft economic growth and inflation data signal the possibility of interest rate cuts, consumers should not expect big savings to become a reality this year, as there remain only two opportunities to cut rates – in September and November.

Most economist outlooks predict a slow cut in rates from the Reserve Bank, which will continue to place pressure on indebted consumers and dampen the propensity for new purchase decisions, he notes.