September 2024 Automotive Market Summary

The automotive industry in South Africa is a dynamic and ever-evolving landscape, and September 2024 has been no exception. Despite the ongoing high inflation and macroeconomic challenges, there is a palpable sense of optimism for a recovery in both new and used car sales by the end of the year. This blog aims to provide car dealership owners and automotive thought leaders with a detailed, impactful, and informative analysis of the current market trends, shedding light on why the data looks the way it does and how it impacts the overall industry.

A Surge in Online Traffic: A Beacon of Trust and Growth

One of the most notable trends in September 2024 is the substantial increase in online traffic, which saw a +20% year-on-year (YoY) growth. This surge indicates that South Africans increasingly trust online portals for their automotive needs, showcasing the growth and strength of platforms like AutoTrader. With over 11 million visits a month, AutoTrader has solidified its position as a key player in the market. This growth in online traffic is not just about gaining a bigger market share; it also points to pent-up demand in the automotive market.

Used Car Sales: A Decline Amid Economic Pressure

Despite the optimism, used car sales in September were down by -9.6% YoY. This decline clearly indicates the economic pressure on consumers and dealers. Historically, during tougher economic times in South Africa, an increase in new car sales would lead to decreased used car sales as new cars fed the used car market. However, the current scenario is unusual, as both new and used car sales have declined. The average used car cumulative cost was down by -8.7% YoY, reflecting the economic strain on the market.

New Vehicle Sales: A Mixed Bag

The total number of new vehicle sales in September 2024 declined by -4.1%, which includes exports. However, new car passenger sales to consumers including rental fleets increased by +2% YoY. This low growth in the local environment indicates that exports are under pressure. The average price of sold used cars was fractionally up by +0.9% YoY, ending at R405,154. The average new car finance price was R411,449, highlighting the slight increase in the cost of new vehicles.

Finance Applications: A Slowdown in Growth

New vehicle finance applications in September 2024 saw a -2.9% decline, with 1,671 fewer applications than in August 2024. Year-on-year, there was a marginal increase of 0.5%. This slowdown in growth reflects the cautious approach consumers are taking in the current economic climate.

Looking Ahead: Challenges and Opportunities

As we move towards the end of October, early signs indicate that used car sales will be down more than -10% YoY. If this trend continues, we will look at lower full-year YoY sales. However, the increase in online traffic and the slight growth in new car passenger sales provide a glimmer of hope for the industry.

The September 2024 automotive market summary paints a complex picture of the industry. While there are significant challenges, there are also opportunities for growth and recovery. Car dealership owners and automotive industry stakeholders must navigate this landscape with a keen understanding of the market dynamics and a strategic approach to capitalise on emerging trends. The industry can steer towards a brighter future by leveraging the growth in online traffic and adapting to the changing consumer behaviour.