More people bought cars in December 2022 than a year before

Motor trade sales increased by 16.6% in December 2022, compared to the same month a year before, data from Statistics South Africa showed on Thursday.

This was after motor trade sales rose 14.4% year-on-year in November.

The largest annual growth in December was recorded in new vehicle sales, up 30.7%,  

StatsSA said. This was followed by fuel sales, which rose 22.5%, while workshop income grew by 17.7%.

The Automobile Business Council (Naamsa) said the new vehicle market registered its 12th consecutive month of year-on-year growth during December 2022, with aggregate industry new vehicle sales at 41 783 units recording an increase of 16.2% compared to the same month the previous year.

The department of mineral resources and energy hiked both grades of petrol by 59 cents a litre for December, with a litre of 95 unleaded petrol priced at R22.81 in coastal areas and R23.46 in the inland regions.

For the whole of 2022, motor trade sales climbed 18.8% compared with 2021, with the main contributors being fuel sales (up 30.3%), new vehicle sales (19.6% higher) and used vehicle sales (up 12.1%)

The vehicle market will likely remain relatively buoyant in the first half of 2023 as pent-up demand is slowly met and dealers work through long waiting lists, economists at Nedbank said.

“The ongoing recovery in the travel, tourism and hospitality industries should continue to buoy the rental market. However, domestic sales will slow as the year progresses, hurt by sticky inflation and the rapid rise in interest rates,” they said in a note.

“On the supply-side, regular and disruptive power outages and the continued risk of global supply chain disruptions will undermine vehicle production and sales.”

Naamsa said it expected single-digit growth in new vehicle sales for 2023, given the strong correlation between new vehicle sales and the GDP growth rate.Furthermore, high inflation and aggressive interest rate hikes in many advanced and developing countries pose downside risks to export sales.