The preferences for motor vehicle segments and body shapes in South Africa are undergoing significant changes, potentially marking a permanent shift. As the market grapples with new realities, even long-standing favourite brands are facing challenges.
Over the past 15 years, South Africa’s motor retail industry has been shaped by slow economic growth, inadequate infrastructure, political instability, and a series of global shocks.
"These include the 2008 financial crisis and the Covid-19 pandemic in 2020, both of which had severe economic and social impacts. More recently, Russia’s invasion of Ukraine and conflicts in the Middle East have heightened global political tensions and hindered economic activity," says Paul Marshall, managing director of Lightstone Auto which analysed the data and produced the graphs.
Globally, car sales rose to approximately 75,3 million in 2023, up from around 67,3 million in 2022. This growth reversed the declining trend seen during the economic slowdown of 2020 and 2021. Supply chain disruptions caused by Covid-19 and geopolitical conflicts led to shortages in the automotive semiconductor industry. Despite these challenges, 2023 sales exceeded pre-pandemic levels and are expected to continue rising through 2024, according to Statista.
"Both global and local factors influence consumer behaviour in South Africa, and the outlook for sales is less optimistic compared to other international markets," adds Marshall.
In 2009, South Africa recorded 393 405 new vehicle sales, the second-lowest in the past 15 years, just above the 389 205 sales in 2020 when Covid-19 struck.
Although the market recovered post-2009, reaching more than 600 000 annual sales between 2012 and 2015, consumer demand weakened before the pandemic, dropping to 536 604 in 2019. Currently, sales have rebounded to similar levels (531 787 in 2023), with further growth dependent on an improving domestic economy.
There are indications of potential interest rate relief from the South African Reserve Bank this year, although government policies may shift following the 2024 election results. Until then, consumers are likely to remain under financial pressure and continue to opt for more affordable vehicles.
Market Dynamics: Brands, Body Shapes, and Segments
Economic challenges may dampen consumer spending, but lifestyle changes and resilience are driving new purchasing trends in South Africa’s car market.
Toyota and Volkswagen remain the top brands, but the competition is heating up. Suzuki surged to third place in 2022, overtaking Hyundai, which had moved to third just a year earlier. Renault and Kia have also entered the top 10, with Renault in seventh place since 2014 and Kia in eighth since 2016. New entrants like Chery and Haval, offering more affordable options from China and South Korea, are also making their mark.
"Interestingly, BMW and Mercedes-Benz have fallen out of the top 10, and as the quality of more affordable vehicles continues to improve, these shifts could become permanent," he says.
Preferences for body shapes are also evolving. The Crossover/SUV segment, which accounted for about 13% of the market in 2009, has steadily grown to become the top choice by 2020, reaching 35% of the market in 2023.
This trend reflects consumers’ concerns about road safety and a preference for more robust vehicles that offer better protection and navigation on pothole-ridden roads. The Double Cab One-ton Pick-up has also seen consistent growth over the past 15 years, becoming the third top seller in 2023, further supporting this observation.
https://bit.ly/3WRwBMl
