Key message: Welcome uptick in passenger sales could signal recovery in second half of the year for the car market.
- NAAMSA released July 2024 new vehicle sales. Passenger and LCV sales increased 2.0% YoY (although down 6.8% on a sales per day basis) with passenger sales up 6.8% YoY. Light Commercial sales decreased by 8.8% YoY – a fifth month of decline after two months of resilience.
- The Motus Import Basket (Hyundai, KIA, Renault, Mitsubishi) declined by 19.7% YoY. The Motus Import Basket market share increased MoM to 12.0% (from 11.9% in May). YTD from July 2024 (Motus FY) the Motus Export Basket declined 19.7% (the total passenger and LCV basket up 2%).
- The Premium Basket increased by 0.3% YoY. The Affordable Asian Basket (Haval, Mahindra, Suzuki, Chery, JAC) increased by 5.4% YoY. The Affordable Asian Basket market share decreased MoM to 22.3% (from 22.4% in June). Locally based OEM’s market share decreased to 61.0% (from 61.5% in June).
- NAAMSA commentary: “The Automotive Business Council said that the welcomed uptick in the July 2024 aggregate new vehicle sales figures could be the turning point for an improved second half of the year performance. Aggregate domestic new vehicle sales in July 2024, at 44,229 units, reflected an increase of 657 units, or a gain of 1,5%, from the 43,572 vehicles sold in July 2023. Export sales, however, decreased by 12,671 units, or 33,2%, to 25,461 units in July 2024 compared to the 38,132 vehicles exported in July 2023.
- In anticipation of improved economic prospects during the second half of the year, the new vehicle market responded positively during July 2024. Increased seasonal sales to the rental industry contributed to the higher sales during the month. Although aggregate new vehicle sales for the year to date remained 6,3% below the corresponding period 2023 and despite various challenges and elements of economic uncertainty, OEMs and importers continue to launch new products into the marketplace. Encouraging aspects for growth and increased consumer spending for the balance of the year include four consecutive months of no loadshedding, a stronger Rand exchange rate, and potentially up to two interest rate cuts before year-end. Positively, the ABSA Purchasing Managers’ Index tracking expected business conditions in six months’ time increased to 69.4 points in July 2024 from 68.1 in June 2024. This is the most optimistic respondents have been about business conditions going forward since early 2022.
- Vehicle exports reflected a substantial decrease during the month compared to the correspondingly high monthly base level 2023. Adverse weather conditions during the month as well as declining exports to Europe, the domestic automotive industry’s top export region contributed to the weaker performance for the year to date. The Eurozone GDP grew by only 0,3% during the second quarter 2024 with Germany’s GDP contracting by 0,1%. The direction and performance of vehicle exports for the balance of 2024 will remain linked to central banks’ gradual monetary easing in major markets.”