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<\/a><\/figure><\/div>\n\n\nUsed car boom <\/strong><\/p>\n\n\n\n Stats SA data shows that real motor trade sales for used cars increased by 3.0%, but sales for new vehicles dropped by 9.7%. <\/p>\n\n\n\n In addition, the National Traffic Information System (NATIS) showed that the number of used vehicle registrations rose by 4.8% in the first six months of 2024 compared to the corresponding period in 2023.<\/p>\n\n\n\n “While used vehicles are generally more expensive than before the pandemic, the notable moderation in inflation should assist in underpinning consumer preference for used vehicles,” said FNB.<\/p>\n\n\n\n Domestic motor vehicle production has experienced a modest decline, dropping by 3.0% YTD in response to weak demand and a normalisation from the robust growth seen post-pandemic. <\/p>\n\n\n\n Other automotive segments are also under pressure. Production of bodies for motor vehicles, trailers, and semi-trailers is down by 9.1%, while the production of parts and accessories is down by 17.8%.<\/p>\n\n\n\n The external trade balance also highlights the general weakness in the domestic automotive sector, with the nominal rand value of imported vehicles down by 23.3% in the first six months of 2024, compared to the major 39.0% increase seen in 1H23. <\/p>\n\n\n\n “Overall, while the domestic automotive sector is experiencing cyclical weakness, particularly due to weak demand, part of this downturn can be attributed to a correction following the solid post-pandemic performance,” said FNB. <\/p>\n\n\n\n “Cost-of-living pressures, including rising vehicle prices, have slightly benefitted the used car market as consumers try to avoid the premium in new vehicle prices.” <\/p>\n\n\n\n “However, an impending interest rate cutting cycle, a more stable rand exchange rate, and expected improvements in household disposable income should provide some support to the automotive sector moving forward.” <\/p>\n\n\n