New vehicle sales in South Africa have experienced a third consecutive month of negative growth in October, causing concern among market pundits.
However, despite this trend, WesBank, a leading financial services provider, remains optimistic about the country’s new vehicle market.
According to figures released by naamsa, SA’s new vehicle sales fell by 2% year-on-year to 45,445 units in October, marking the fifth month of declining sales this year.
Lebo Gaoaketse, Head of Marketing and Communication at WesBank, emphasizes that while October’s performance may seem discouraging, it should not be seen as a curse for the market.
In fact, South Africa’s new vehicle market has shown year-to-date growth of 2.1% compared to the same period last year, indicating a slow but steady recovery.
Gaoaketse highlights that this represents a healthy increase of 9,027 more new vehicles sold this year compared to 2022, which is a positive step in the market’s recovery.
Gaoaketse further provides context by expanding the comparisons across a 12-month period year-on-year.
The data reveals that the market has performed 4.1% better from November 2022 to October 2023 compared to the same period a year ago.
This demonstrates the market’s sensitivity to external factors and emphasizes the importance of taking a longer view of growth as the market continues to recover.
The market’s recovery is gaining traction, with sales volumes returning to pre-pandemic levels last seen in 2019.
Despite the decline in sales volumes, Gaoaketse highlights that there is still a strong appetite for new vehicles, with applications up nearly 7% year-on-year.
This pent-up demand presents opportunities for manufacturers to capitalize on with incentivized deals, provided that banks can accommodate consumer affordability.
WesBank’s data indicates that customers are financing their vehicles, indicating a positive outlook for the market.
Overall, while the negative growth in new vehicle sales may raise concerns, WesBank remains optimistic about the recovery of South Africa’s new vehicle market.
The year-to-date growth, the market’s performance over a 12-month period, and the strong demand for new vehicles all contribute to a positive outlook for the industry