South Africa’s Car Sales Hit Six-Year High, but Export Roadblocks Loom

A Tale of Two Markets

South Africa’s auto industry is riding a strange wave right now: roaring ahead at home while hitting potholes abroad. New figures from the Automotive Business Council (Naamsa) show domestic sales surging to levels last seen in 2019, but exports, particularly to the US are buckling under the weight of fresh tariffs.

US Tariffs Hit Like a Speed Bump

In August, Washington’s 30% tariffs on South African exports finally took full effect, hammering two of our biggest earnerscars and agriculture. Vehicle exports to the US collapsed by more than 70% in the first quarter of 2025, with even steeper drops of 80% and 85% in April and May.

The ripple effect has been brutal: carmakers now face fiercer competition in other traditional markets as they scramble to redirect shipments.

Still, not all is bleak. In August, exports ticked up slightly year-on-year, with 37,500 units shipped compared to 35,310 the year before. For the year to date, exports are about 3% higher than 2024a reminder of the sector’s resilience, even in a hostile climate.

Home Turf Keeps the Engine Running

If exports are struggling, the local showroom floors are buzzing. August domestic sales jumped nearly 19%, climbing to 51,880 unitsthe best monthly performance since October 2019. This marked the 11th consecutive month of growth, with half a year of double-digit gains.

What’s driving this boom?

• Cheaper models flooding the market

• Lower interest rates, with the Reserve Bank cutting the repo rate to 7% in July

• Easing credit conditions, as household and private-sector lending edges higher

• A slight reprieve at the petrol pump, though rising diesel costs keep truckers on edge

The National Automobile Dealers Association (NADA) reported heavy foot traffic in showrooms, with private buyers leading the charge. Ryan Seele of NADA noted that many South Africans are finally feeling some relief from rate cuts, sparking stronger buying intenteven if test drives don’t always convert into sales right away.

Affordability Rules the Road

WesBank data reveals that most car buyers are sticking to a sweet spot: between R350,000 and R400,000. It’s the range dominated by South Africa’s two biggest brands, but new entrants with budget-friendly offers are making inroads.

Millennials, in particular, are driving the market, literally. Buyers under 35 now make up 45% of WesBank’s customer base, stretching contract terms to manage affordability while still opting for new wheels.

What’s Next for the Industry?

Naamsa admits that exports remain the sector’s Achilles heel. Rerouting shipments and exploring new markets will be critical if South Africa wants to stay competitive globally. But at home, the outlook is upbeat: consumer confidence is firming, inflation is steady, and lower borrowing costs are freeing up household budgets.

For now, South Africa’s auto industry feels like it’s running two different races, sprinting ahead at home, while fighting uphill abroad. Whether the local boom can balance the export squeeze remains the billion-rand question.

South Africa’s love affair with cars is alive and well, but until the tariff storm clears, our auto industry’s export dreams may need some re-engineering.

{Source: IOL}

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