South Africa’s passenger vehicle market showed unexpected strength in February 2025, with sales increasing by 17.1% compared to the same period last year. This surge comes despite economic uncertainty, including delayed budget announcements and concerns over trade agreements. The rise in sales can be attributed to several factors, including competitive pricing in the entry-level segment, a slight interest rate reduction at the end of January, and speculation over a potential VAT hike. More consumers opted for affordable brands such as Suzuki, Hyundai, Kia, Mahindra, and Chery, highlighting the growing importance of budget-conscious buyers in the market. While passenger car sales thrived, light commercial vehicles struggled, dropping by 11.3% due to stock shortages and weak business confidence. Heavy truck sales also declined, reflecting broader concerns in the logistics sector.
Another trend shaping the market is the growing preference for used vehicles. According to industry reports, second-hand car financing outpaced new vehicle financing by a ratio of 1.56:1 in the last quarter of 2024, up from 1.23:1 a year earlier. Consumers are opting for more affordable pre-owned cars, shifting away from premium brands as household budgets remain under pressure. Dealers played a significant role in the market, accounting for over 84% of total vehicle sales in February. The rental sector also remained strong, making up 11.1% of total purchases and driving demand for passenger cars. However, export figures were disappointing, declining by 12.3% to 34,565 units, adding further pressure to the industry’s global competitiveness.
Looking ahead, the automotive sector remains cautiously optimistic. The end of the tax year in February may have influenced some buyers to accelerate their purchases, meaning March figures could reflect a more stabilised trend. Additionally, manufacturers and dealers are closely monitoring trade policies and economic developments that could impact future sales. While challenges such as stock shortages and global trade uncertainty persist, the resilience of the South African car market suggests that demand remains strong, particularly in the affordable vehicle segment. If economic conditions improve and financing remains accessible, the industry could sustain this growth momentum in the coming months.