Vehicle market enters 2026 on firmer footing but affordability risks loom

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South Africa's new vehicle market has carried its positive 2025 performance into the new year, with January sales confirming that the industry’s upward trajectory remains on track. The market recorded 50,073 sales for the month, up 7.5% on January 2025 according to naamsa | the Automotive Business Council. This represents a more moderate growth rate than the 10.4% increase recorded in January 2025, suggesting the market is transitioning from rapid recovery to sustainable expansion.

Viewed over the past three years, the improvement is clear. In January 2024, aggregate new vehicle sales stood at 42,023 units. By January 2025, sales had risen to 46,398 units as the market began its recovery. In January 2026, industry sales strengthened further to 50,073 units, confirming that volumes above the 50,000-unit mark are becoming increasingly typical rather than exceptional.

“Looking at successive January numbers tells the story better than any single month,” says Lebo Gaoaketse, Head of Marketing and Communication at WesBank. “January 2024 was defined by restraint, January 2025 by recovery and January 2026 by consolidation. What we’re seeing now is a market that has stabilised, not overheated.”

Passenger cars rose 7.1% to 37,190 units, a more measured pace than January 2025's 18.3% surge when rental companies aggressively rebuilt fleets. Light commercial vehicles rebounded strongly with 11% growth to 10,996 units, reversing the 9.1% decline seen a year earlier. However, medium commercial vehicles declined 5.9% whilst heavy trucks and buses dropped 4.3%, reflecting ongoing caution in infrastructure investment decisions.

The health of the new vehicle market reflects continued consumer affordability which is underpinned by the fact that inflation remains anchored within the Reserve Bank's target range, with long-term expectations at multi-year lows.

“The repo rate held holding at 6.75% in January and looming potential cuts in March should give consumers some cautious optimism. If the Rand's appreciation to multi-year highs against the dollar remains stable, it will help moderate vehicle prices. The presence of competitive imports will also continue to give buyers diverse options across segments,” says Gaoaketse.

This all exists against the backdrop of an intensified focus on government's automotive policy review, which addresses tariff structures and localisation incentives. A firmer rand and continued competition from imports may help moderate prices, but policy decisions around tariffs and localisation incentives will be a key watch point in the months ahead.

At the same time, the domestic automotive sector has received important structural support. Announcements around expanded local production and measures aimed at strengthening South Africa’s manufacturing base provide longer-term backing for competitiveness, employment and supply stability, particularly as global OEMs reassess production footprints in response to shifting trade dynamics.

Gaoaketse says, “The market has positioned itself well for 2026, but important decisions lie ahead. Tariff decisions often have significant ripple effects. Ensuring the continued growth of the sector means balancing the needs of the consumer and the industry. Given the current volatile nature of the global market-place, it will be a fine line to walk for policy makers.”

January's performance suggests underlying momentum is genuine rather than temporary. While this is good news going forward, sustained growth will require the right balance between protecting local manufacturing and maintaining market accessibility. The finalisation of the automotive policy review will provide important clarity on the industry's direction, with the market having entered 2026 on solid footing.