02 June 2025 – South Africa’s new vehicle market continues its upward momentum with an impressive 22% year-on-year growth in May, marking the eighth consecutive month of gains and dispelling any lingering doubts about the industry’s revitalised recovery. According to the latest data from naamsa | the Automotive Business Council, 45,308 new vehicles were sold in May 2025, compared to 37,139 units in the same month last year.
While this marks the strongest growth since the 30.9% surge seen in July 2022 — a period still influenced by pandemic recovery distortions — May’s increase is notable for its solid and unswayed performance, reflecting genuine market strength rather than exceptional external factors. It’s important to highlight, however, that May 2024’s sales were uniquely subdued due to the national election cycle, with consumers choosing the ballot box over showrooms.
“Twelve months ago, South Africans voted at the polls, not on showroom floors,” explains Lebo Gaoaketse, Head of Marketing and Communication at WesBank. “May 2024 sales were depressed and 14.2% down compared to May 2023, providing a particularly relevant context to this year’s performance.” This election-month effect accentuates the strength of this year’s figures, underscoring a true rebound in market activity.
The year-to-date sales volume tells a similar story. With 231,719 vehicles sold in the first five months of 2025 — a 12.6% increase over the same period last year — the industry is firmly on a recovery path, although Gaoaketse advises cautious optimism.
“While volumes continue to be confidence-inspiring, South African household budgets remain under pressure,” he notes. “The market’s expected slow recovery is continuing to play catch-up, but the industry should remain vigilant and continue driving innovative reasons to attract consumer and business purchases.”
Indeed, affordability remains a key challenge for many buyers. Despite the national budget in April providing relief by freezing VAT rates, consumers are now grappling with additional levies embedded in fuel prices. “The feel of this impact will be delayed given the expected drop in prices this week due to currency strength,” Gaoaketse comments. “But the levies are a constant new tax affecting mobility budgets going forward.”
Encouragingly, the South African Reserve Bank’s recent decision to lower interest rates by 0.25% is expected to inject fresh stimulus into the market. “Measures to open up affordability to South Africans are welcomed,” says Gaoaketse. “Relief for indebted consumers and stimulus to new vehicle customers will provide continued impetus to the market this year.”
WesBank’s finance agreements, largely linked to the prime lending rate, will see direct benefits from this rate cut, easing monthly repayments for many buyers. However, affordability pressures persist, reflected in an 8.6% decrease in the average finance amount across the bank’s new vehicle book — a clear sign that consumers are tightening their purse strings despite positive market trends.
Breaking down the market by segment, passenger cars led the growth charge with a 30% increase, totaling 31,741 units sold in May. Of these, 87.5% were direct consumer sales off dealer showroom floors, while the rental sector nearly doubled its volume compared to May last year, indicating growing fleet activity. Light Commercial Vehicles (LCVs) also contributed positively with a 5.8% rise to 10,938 units, reinforcing steady demand across multiple segments.
As South Africa approaches the midpoint of 2025, the automotive industry’s trajectory suggests cautious optimism. The market’s steady recovery — buoyed by improved consumer confidence, interest rate relief, and resilient demand — signals that, despite economic headwinds, new vehicle sales are set to continue their growth journey. Yet, the industry must remain agile, creatively engaging consumers and businesses alike to sustain momentum in a landscape still marked by affordability challenges.
In summary: May’s 22% year-on-year sales growth, following eight months of consecutive gains, marks a pivotal milestone for South Africa’s automotive market. While conditions remain complex, the combined effects of economic policy shifts and sustained demand point toward a cautious but positive outlook for new vehicle sales in the months ahead.
