Confidence Building in New Vehicle Sales

While new vehicle sales started the year in hopeful spirit, February sales gave even more reassurance that positive growth may be possible for the automotive industry this year. Cautious optimism in January became more cemented confidence in February, with sales up 7,3% in the first normal trading month.

In addition, February sales capitalised on January growth to increase volume month-on-month despite the traditionally anomalous first month of the year that often carries sales over from December. The market sold 2,1% more vehicles in February than in January and a sizeable 3,255 more units year-on-year to carve a 47,978 market total stake in the sales ground, according to data from naamsa | the Automotive Business Council.

“Despite February being a short month, it was not a particularly short sales month, providing wherewithal for consumers to act on renewed confidence and easing affordability,” says Lebo Gaoaketse, Head of Marketing and Communication at WesBank.

Three consecutive downward interest rate adjustments have provided a 0,75% relief in prime lending rates, with the most recent cut in January. “While further expected cuts would continue to address affordability and stimulate market activity, other inflationary increases, including electricity tariffs and fuel prices, persist and have many economists questioning the expected pace of interest rate cuts, warning there may be fewer cuts throughout the year than previously envisioned,” says Gaoaketse.

However, short-term uncertainty in the wake of the postponed budget speech and the fleeting return of loadshedding during February, may stunt the swell of positivity in the market. New vehicle sales have shown growth year-on-year since October. Year-to-date sales growth for 2025 now sits at 9,5% to 94,968 units, contrary to forecasts of continued slow growth.

Passenger car sales continued to display growth momentum, with February sales in the segment up 16,8% to 33,757 units. Some of this growth came from continued activity in the rental market, year-to-date sales to rental fleets up 33,4% year-on-year. Volumes are also being bolstered by new Chinese brand entrants to the market at attractive price points.

Light Commercial Vehicles (LCVs) continued their momentum the other way, sales down 11,4% to 11,802 units. LCV sales year-to-date have declined 10,2% to 21,705 units.

“2025 sales have certainly come out of the starting blocks with gusto,” says Gaoaketse. “The market will be hoping for stamina at similar levels, but affordability remains high on South African consumers’ budget considerations and could still trip up this early growth momentum.”