CHAMWE KAIRA
The confluence of positive economic indicators and the resilience of the volume passenger car segment during the last quarter of 2024 suggests a potential rebound for the new vehicle market in 2025, the Automotive Business Council has revealed in its December 2024 new vehicle sales statistics.
Namibia imports a large number of cars from South Africa.
The council said the South African Reserve Bank’s two interest rate cuts towards year-end, the first in four years, coupled with easing inflation, have created a more favourable economic environment.
Additionally, lower fuel prices have bolstered consumer confidence and disposable income, as gasoline prices were at the lowest point they have been in nearly three years in 2024.
“Further interest rate cuts in 2025 would support vehicle affordability across all the various segments. The domestic outlook for 2025 is expected to improve, driven by a revival in business and consumer sentiment stemming from improvements in the country’s key economic indicators,” the council said.
The South African Reserve Bank stated that risks to the country’s growth outlook are assessed to be balanced, but that growth could be higher from 2025 onwards, given ongoing reforms, especially in the network sectors, such as electricity and transport.
With an improved GDP growth rate of around 1,5% projected for 2025, the new vehicle market would likely improve by single digits compared to the level of 2024.
The council said the expected ongoing easing of monetary policy in the South African automotive industry’s key export markets could see the vehicle export momentum turn positive again over the medium term.
New vehicle sales in 2024 fell compared to 2023, even though the last quarter of 2024 was promising, the council said.
“Consequently, the new vehicle market hasn’t been able to recover to the 2019 pre-pandemic level in four years and is likely to be delayed for another year,” the council said.
The new vehicle market registered its third consecutive month of year-on-year increase in December, with aggregate industry new vehicle sales at 41 273 units recording an increase of 1 011 vehicles, or a gain of 2,5% compared to the total new vehicle sales of 40 262 units during the corresponding month in 2023.
“The December 2024 new passenger car market reflected a sound performance with a year-on-year volume increase of 8,2% but in the case of light commercial vehicles, a loss of 10,3%. Sales of medium commercial vehicles increased year-on-year by 7,6% while heavy commercial vehicles and buses decreased by 11,8%.”
Vehicle export sales in December 2024 continued their downward slope and at 25 931 units, reflected a loss of 1,158 vehicles or a decrease of 4,3% compared to the 27 089 vehicles exported during December 2023 to end the year at 308 380 units, the council said.
“Overall, out of the total reported industry sales of 41 273 vehicles, an estimated 36 465 units or 88,4% represented dealer sales, an estimated 8,1% represented sales to the vehicle rental industry, 2,1% to government, and 1,4% to industry corporate fleets. “
