August Vehicle Sales

New vehicle sales stumbled in August, showing the first potential signs of strain amidst economic headwinds. The market has performed resiliently despite tightening household budgets, low business and consumer confidence, and impact of the energy crisis among other factors. 

According to figures released by naamsa | the Automotive Business Council, SA’s new vehicle sales fell 3.1% in August to 45,679, the biggest year-on-year decline in sales since December 2021. 

“August’s negative growth shouldn’t dismay completely, however,” says Lebo Gaoaketse, Head of Marketing and Communication at WesBank. “Although August sales experienced their biggest decline in 21 months, this volume is still 5.2% ahead of July sales. In addition, August 2022 sales were amongst the best-performing sales months last year.” 

Gaoaketse says the broader context of July sales does provide some cause for concern; but being a single month’s performance, it is not indicative yet of a trend. 

“New vehicle sales have defied the odds in their slow recovery since the pandemic,” says Gaoaketse. “Given the tough economic conditions, consumers have been under immense budget pressure since 2020. Consequently, two major trends impacted car purchasing behaviour: the pre-owned market boomed in the face of affordability; or consumers held onto their cars for longer rather than upgrading.” 

Head of Marketing and Communications at Wesbank: Lebo Gaoaketse, Image: Supplied 

Within this context, new vehicle sales continued to recover after the pandemic, more recently impacted by replacement cycles finally becoming unavoidable and the subsequent softening of the pre-owned market – by virtue of lower stock levels and a lower appetite for inflated prices. 

“As a result, August sales are not poor despite being 3.1% lower than a year ago,” explains Gaoaketse. “They are the third-best performing sales month this year, as were August 2022 sales up to that point.” 

Passenger car sales performed relatively better than July, down 6.7% (compared to -9.7%) to 28,951. Of concern for dealers will be fewer of those units being retailed off showroom floors. Dealer channel sales were down 12,4% year-on-year, meaning that 80.2% of passenger cars were consumer sales. 

The dealers fared better in the Light Commercial Vehicle (LCV) market, however. Dealer sales were up 9.8% in a segment that grew 2.7% to 13,652, showing the continued appeal of these vehicles for the South African market. 

Year-to-date sales have softened off the back of the August performance, down 1% to show overall market growth of 3.4% year-on-year. Total sales volume for the year to August is 355,246.