New-vehicle credit application volumes at WesBank are more than 20% higher than a year ago, says the asset finance group.

This comes as new-vehicle sales blitzed through the 50 000-unit-a-month mark to 51 383 units in July, in what is now ten consecutive months of growth.

July was, in fact, the best sales month since October 2019.

WesBank says while sales volumes were assisted by the month’s more-than-usual 23 selling days, it was also driven by “unprecedented demand, increased affordability and improved sentiment”.

The group adds that new-vehicle sales volumes are currently being driven by consumers, and not institutional buying.

Rental and government sales were, in fact, down 6.7% in July, while sales from dealer showroom floors increased by 20.3%.

WesBank believes the 0.25% rate cut announced by the Reserve Bank at the end of July will continue to stimulate the new-vehicle market going forward.

“There remains a direct correlation between the rate-cutting cycle and the upturn in new-vehicle sales,” says WesBank marketing and communication head Lebo Gaoaketse.

“The market should continue to expect growth if interest rates remain lower.”

Gaoaketse believes there is scope for a further rate cut before the end of the year.

“With inflation well within target, an additional cut would allow the [auto] industry to potentially show double-digit growth for the year.”

Gaoaketse says cumulative interest-rate cuts of 1.25% since the rate-trimming cycle started, now save a typical new-car buyer around R257 a month.

“The sweet spot of the new-vehicle market is a price point of R370 000, according to WesBank’s book.

“[This means] the interest saving over the loan period could be over R18 500, which shows the impact lower rates have on stimulating the market and aiding affordability.”

The current lower-inflation economy, which have provided room for rate cuts, is also providing relief to household budgets in other areas – which means they have more disposable income at hand.

“All these factors combined are assisting consumers and businesses to access finance,” says Gaoaketse.

Growing Influence of Asian Brands
"Despite global uncertainty and the looming threat of tariffs, South Africa’s vehicle market continues to show remarkable resilience," notes National Automobile Dealers’ Association chairperson Brandon Cohen.

This is especially true of the new-passenger-car market, which grew by 20.1% in July.

Cohen says a key contributor to the robust passenger market is the growing influence of Chinese and Asian vehicle brands.

Four Chinese importers are now among the top 15 best-sellers, including newer entrants such as Omoda/Jaecoo and Jetour.

Financial institutions have also shown confidence in these brands by offering white-labelled finance packages, further supporting their market penetration, says Cohen.

Meanwhile, manufacturers such as Kia and Mahindra continue to feature prominently in the top ten, reflecting strong demand for affordable, value-driven options, a trend that has also underpinned Suzuki’s consistent success.

“The rapid rise of Chinese and Asian brands reflects a shift in buyer preferences toward affordability and value. It’s a trend we expect to intensify as more such brands enter the market,” says Cohen.

He echoes WesBank’s comments that the recent interest rate cut should boost the new-vehicle market further.

“While the South African Reserve Bank has not yet formally adopted a 3% inflation-targeting framework, doing so could provide long-term benefits to the automotive sector,” he adds.

“However, ongoing volatility in global oil prices and pressure on the rand, both exacerbated by [US trade] tariff-related uncertainty, remain areas of concern.”