National Automobile Dealers’ Association (NADA) chairperson Brandon Cohen says he is “cautiously optimistic” about new- vehicle sales in 2025.

This follows a 3% decline in the total market last year, to 515 712 units – the lowest yearly number since the Covid-19 pandemic.

“The coming year will be intriguing, with local [automotive] industry wage negotiations and changes in the US administration adding to the complexities,” says Cohen.

“Managing consumer demand amid rising cost pressures remains challenging for our retail dealers,” he adds.

“Consumers are increasingly opting for smaller, more affordable vehicles or high-quality pre-owned models to navigate economic constraints, which, in turn, places pressure on retailers’ bottom lines.”

Cohen says hybrid vehicle sales are also gaining traction in the local market, driven by fluctuating petrol prices and growing interest in sustainable solutions.

He believes that stabilising inflation, potential further interest rate cuts and easing energy constraints could offer some relief for consumers and businesses in the new year.

However, global factors such as volatile oil prices, geopolitical tensions and ongoing global conflicts are expected to remain potential disruptors to the automotive sector in the months ahead.

Cohen says dealerships that can offer flexible financing solutions and align their inventory with current affordability trends should have an edge over their competitors this year.

“We are also seeing some [vehicle manufacturers] adjusting pricing to counter more affordable Chinese alternatives, and I expect this trend to continue into 2025.”

Looking at the year that was, Cohen says the sluggish economy continued to weigh on the new-vehicle market in 2024, despite an uptick in the passenger car segment in the last quarter.

“Vehicle sales in South Africa typically align with the country’s gross domestic product (GDP), and this was again the case last year.

"Meaningful growth is unlikely until the overall economy is revived, and we transition into a growth phase for our GDP.”

While passenger-car sales managed a modest 1.1% increase in 2024, all three commercial vehicle segments recorded declines.

Cohen attributes some of the sharp decline in light commercial vehicle sales to a struggling SA Taxi pulling back on its financing activities, “which prompted other financial institutions to follow suit. "This led to a sharp decline in taxi sales, which fell from well over 1 000 units per month to just a few hundred since March”.

Truck sales of all sizes were impacted by SA Inc’s lack of confidence in a swift economic recovery.