New vehicle sales go into September reverse

New vehicle sales in September 2023 (45 997 units) were 4.7% down on September 2022, according to naamsa, although marginally up by 0.3% compared to August 2023.

Importantly, however, overall sales for the first nine months of 2023 were 2.5% higher than the previous year, and 16.2% above sales for the same window in 2021.

More significantly, new vehicle sales in 2023 are 0.8% ahead of volumes recorded in the same period in 2019, an indication that the market is running ahead of pre-Covid levels.

New vehicle sales

Passenger vehicle sales dropped by 8.5% year-on-year in September 2023 to 29 646 units, but Light Commercial Vehicles sales picked up 4.7%, reaching 13 179 units, when compared with September 2022.

naamsa reported 401 432 units were sold between January and September, of which around 84% represented dealer sales. Passenger vehicle sales were down 3.5% year-on-year for the nine months, while sales of LCVs grew 17.2% compared to 2022.

The car rental industry accounted for an estimated 13.2% of new Passenger car sales in the January-September window, lower than the 13.6% share in the 2022 window, and the 13.5% in 2021.

January to September - Passenger & Light Commercial new vehicle sales

We expect the market to grow in 2023 despite continued macroeconomic pressures.

GDP is expected to grow at significantly lower levels in 2023 compared to 2022, but the Rand appears to be steadying against major global currencies. Headline consumer inflation is projected to drop back within the Reserve Bank’s 3% - 6% target range and the Reserve Bank may end the current cycle of interest rate hikes before the end of the year. The global shortage in semi-conductors is easing and manufacturers are returning to normal production schedules.

New vehicle sales in 2023 (see graph below) are anticipated to reach around 541 000 units, of which 511 000 are Light vehicles (Passenger and Light Commercial). Overall, we expect new vehicle sales to grow by around 2% in 2023, lower than our original forecast of 4%.

New vehicle sales - 2018 to 2023

Market segments – what are consumers buying?

The Crossover segment (which includes the Haval Jolion, Toyota Corolla Cross and Volkswagen T-Cross) led Light Vehicle (Passenger & LCV markets) segment sales in South Africa in the first nine months of 2023, with 80 434 new units sold – of which 88.6% were Dealer sales, and 7.0% reported through the Rental channel.

Crossover sales, however, were 9% down over the first nine months compared to the same period in 2022, and make up 21.3% of all Light Vehicle sales so far in 2023, less than the 23.9% market share for the first nine months of 2022.

The Entry segment (which includes Renault Kwid, Toyota Starlet and VW Polo Vivo) was the second-best performing segment in terms of volume with 67 206 units sold over the first nine months of 2023, 3% less than the corresponding period last year.

Panel Van segment sales (which includes the Hyundai Grand i10 Cargo, Toyota Quantum and Volkswagen Caddy Cargo) rocketed by 51.6% year-on-year in the January-September period from 2022, which in turn was 1.8% higher on the segment total for the comparable period in 2021.

This makes the Panel Van segment the best performing Light Vehicle segment in terms of sales growth, despite not being one of the bigger segments. Over the first nine months of 2023, the Panel Van segment made up 1% of all Light Vehicle sales, up from the 0.7% market share in 2022.

The Minibus segment (which includes Toyota Hiace, Toyota Quantum and Volkswagen Caddy) was the second most improved segment for year-on-year growth in the first nine months of 2023 with sales climbing 39.9% from a year earlier.

Light Vehicle Segments - share of Light Vehicle market (January - September)

Hybrid & Electric vehicle sales

New Hybrid and Electric Passenger vehicle sales (which includes Traditional Hybrid, Plug-in Hybrid and Battery Electric vehicles) for the first nine months of 2023 numbered 5 157 units, 66.9% up on 2022, which in turn had accelerated 796% from 2021. The full Passenger market share for these vehicles was 2% for the first nine months of 2023.

January to September - Hybrid & Electric vehicle share of passenger sales

Traditional Hybrid vehicles continue to dominate sales, with an 83% share of the sub-segment over the first nine months of 2023. Battery Electric vehicles make up 14% of sales and Plug-in Hybrid vehicles are responsible for 3%.