The South African automotive industry has started the year on a high note, with new vehicle sales in January 2025 registering a notable 10,4% increase compared to the same month in 2024. According to data released by naamsa | The Automotive Business Council, this positive trend continues the momentum from the final quarter of 2024, buoyed by improving economic conditions and growing consumer confidence - with Suzuki moving up to second on the car sales charts, knocking Volkswagen back to third.

naamsa CEO Mikel Mabasa expressed optimism about the year ahead, stating: “We are confident an improving economic outlook, alongside stronger business and consumer sentiment, will support continued growth in the new vehicle market in 2025.” 

The passenger car market recorded a significant uptick, with sales rising by 18,3% year-on-year to 34 530 units. A key driver of this growth was the car rental sector, which accounted for 19,1% of all passenger vehicle sales in January. The increased availability of competitively priced models, including those from emerging Chinese brands, has also contributed to the segment’s robust performance.

Jan 2025 vehicles sales chart

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Conversely, the light commercial vehicle (LCV) segment struggled, registering a 9,1% decline to 9 901 units. Meanwhile, medium commercial vehicle sales saw an encouraging 11,6% rise to 569 units, while heavy truck and bus sales dipped slightly by 2,8% to 1 398 units.

The commercial vehicle sector is generally an accurate barometer of business confidence in the economy and, sadly, that does not look too good right now and not helped by the steel industry woes, the Trump reaction to the Land Expropriation Bill and the subsequent crash of the Rand along with increasing fuel prices.

Export Growth

South Africa’s vehicle exports surged by 29,7%, with 25 348 units shipped in January 2025 compared to 19 545 in the same period last year. Mabasa attributed this strong export performance to stable demand from key international markets and anticipated policy shifts that may further boost trade. However, he cautioned  uncertainties surrounding US trade policies could impact future export volumes.

The automotive industry’s promising start to the year has been aided by favourable economic conditions, including a 0,25% interest rate cut in January. Analysts predict additional rate cuts could enhance vehicle affordability and further stimulate demand. The South African Reserve Bank forecasts GDP growth of 1,5% in 2025, with some economists projecting figures closer to 2%.

Jan 2025 vehicles sales graphic

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Despite this positive trajectory, industry experts remain cautious about persistent economic pressures, including rising living costs and potential electricity tariff hikes. The National Energy Regulator of South Africa (NERSA) has approved a 12,74% electricity price increase effective from April 2025, a rate significantly higher than current inflation levels.

Brandon Cohen, Chairperson of the National Automobile Dealers Association (NADA), welcomed the industry’s strong start but warned of ongoing challenges.

“While the increase in sales is encouraging, affordability remains a pressing issue. Rising fuel costs, electricity price hikes, and the possibility of further load shedding could impact consumer confidence,” he stated.

WesBank’s Head of Marketing and Communication, Lebo Gaoaketse, echoed this sentiment, highlighting the importance of market context: “January’s figures are impressive, but it’s essential to consider seasonal factors. Many buyers delay purchases in December, leading to a stronger January performance. Additionally, some transactions originally intended for January were recorded in December, affecting year-on-year comparisons.”

The industry remains hopeful further interest rate cuts, government policy announcements and a stabilising economy will sustain market momentum.

Colin Windell for Colin-on-Cars in association with

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