July delivered the best monthly new-vehicle sales tally since October 2019, says naamsa | The Automotive Business Council.

Last month’s new-vehicle sales, at 51 383 units, were up 15.6% compared with July last year, with the action on South Africa’s showroom floors driven by improved consumer confidence, favourable credit conditions and a steady recovery in disposable incomes, notes the auto sector body.

The new-passenger-car market jumped by 20.1% in July, to reach 36 248 units – the highest number since January 2017.

Sales of new small trucks, bakkies, minibuses and panel vans increased by 6.9%, to 12 356 units.

Sales of medium trucks, at 703 units, were up 13.9%, while sales of heavy trucks and buses declined by 1.3%, to 2 076 units.

“We are encouraged by the sustained positive momentum in new-vehicle sales, which clearly underscores the resilience of South African consumers and the strategic importance of a stable macro-economic policy environment,” says naamsa CEO Mikel Mabasa.

In contrast to the largely positive news on the local front, export volumes for July decreased by 1.9%, to 35 379 units.

This drop comes amid long-standing tariff threats by the US – now set to materialise from August onwards.

naamsa warns that pressure is mounting within the local vehicle production base as other export-oriented economies are redirecting their product volumes toward South Africa’s established markets.

“South Africa’s automotive industry has long relied on the strength of its export engine to drive production, attract investment and create high-value employment,” says Mabasa.

“The current environment is testing that model, but our ability to maintain solid export volumes amid escalating trade uncertainty demonstrates the commitment of our [vehicle manufacturers] to South Africa’s industrial base.”

While most other countries have negotiated reduced tariffs from the US government, South Africa has been unable to do so.

This will translate into declining competitiveness compared with peer countries, warns naamsa.

“…The automotive industry stands exposed, both in immediate volumes and long-term market access,” says Mabasa.

“We are not giving up on the US market, but we must now look to deepen regional trade, expand market access in Africa and Asia, and accelerate the rollout of South Africa’s new-energy vehicle transition strategy to attract new investment and safeguard production capacity.”

This year marks a critical juncture for the local automotive sector as it prepares to sit down with government for the review of the South African Automotive Masterplan 2035 and the Automotive Production and Development Programme Phase 2.

These reviews will aim to align government policy with shifting global market dynamics, and to reset performance goals in light of emerging domestic and export challenges.