The National Automobile Dealers’ Association (NADA) says there are growing signs of gains being made in the South African economy, despite the fact that several structural challenges remain.

According to the dealer body, these improvements could support increased confidence across the new-vehicle market going into 2026.

NADA chairperson Brandon Cohen says recent macroeconomic signals have been encouraging.

“We are seeing interest rates beginning to ease, rand volatility settling, and far greater operational stability from Eskom and Transnet.

“Alongside better-than-expected GDP performance, these factors are creating a more supportive environment for both consumers and businesses.”

Cohen says dealers are reporting slightly improved consumer confidence, supported by more favourable financing conditions, even if consumers remain cautious about how they spend their money.

Stabilising economic indicators are also encouraging renewed interest from fleet buyers, while well-structured dealer incentives are helping to ease pressure on household budgets.

Cohen stresses, however, that these improvements need to be considered alongside ongoing challenges.

“Municipal deterioration, concerns around crime and law-enforcement effectiveness, as well as political uncertainty ahead of the 2026 municipal elections all continue to weigh on public sentiment.”

Looking Towards 2026
While it is difficult to predict how the new year ahead will unfold, there are a number of developments, both locally and globally, that may influence sentiment and operating conditions as South Africa heads into the new year, says Cohen.

The first is South Africa’s municipal elections, which may shape the public mood, as well as service-delivery priorities.

Within an arena that features new political parties and shifting political dynamics, the months leading up to the elections could influence overall sentiment.

US mid-term elections may also have an effect, as political outcomes in this major economy often ripple through global markets.

While the direct impact on South Africa is difficult to quantify, shifts in US policy and economic direction may influence global trade and investor confidence, notes Cohen.

Thirdly, as AI continues to expand rapidly across industries worldwide, it remains to be seen whether this cycle strengthens further or starts to level out.

Any shift in the pace of AI adoption could influence job structures and economic opportunities, particularly in developing markets, says Cohen.

Recent improvements in South Africa in terms of electricity stability, port performance and ratings-agency sentiment are encouraging, he adds. The question for 2026, however, is whether these gains are sufficiently sticky to support broader economic growth and job creation.

As for the influx of new models into the South African new-vehicle market, particularly from India and China, Cohen says the pace of new entries may begin to level out as the market adjusts to the increased variety.

“All of these shifts, both at home and internationally, highlight how many moving parts influence our environment.

“While nothing is guaranteed, there is room for cautious optimism if the current momentum continues.”