South Africa new vehicle sales climb 22% in May as interest rate cut boosts confidence
New passenger car sales reached 31,741 units in May, up 30% from 24,419 units in May 2024. Light commercial vehicles, including bakkies and minibuses, increased 5.8% to 10,938 units. Medium and heavy truck segments also posted solid gains, with medium commercial vehicles rising 22.7% to 660 units and heavy trucks and buses up 6.7% to 1,969 units.
Dealer sales accounted for 88.4% of May volumes, with the vehicle rental industry representing 6.8%, corporate fleets 3.0%, and government 1.8%. Car rental alone made up 8.5% of new passenger car sales during the month.
The SARB's action comes as inflation eases to 2.8%—below the 3%–6% target range—while the rand strengthens amid improved investor sentiment. Lower interest rates are expected to reduce borrowing costs for both consumers and manufacturers, encouraging capital expenditure, tooling upgrades and model retooling across the automotive value chain.
Exports, however, fell 14.6% year-on-year to 30,112 units in May, down from 35,277 in May 2024. The decline was attributed to a major OEM halting production from mid-April to mid-May for facility upgrades ahead of a new model rollout. Year-to-date, export volumes remained 1.4% ahead of the same period last year.
Naamsa also welcomed the ongoing discussions between National Treasury and the SARB on potentially lowering the official inflation target midpoint from 4.5% to 3.0%. A structurally lower inflation environment could support sustained rate cuts, improving affordability for consumers and competitiveness for exporters.
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