Will South Africa's automotive sector continue its recovery despite rising oil prices?
Sales achieve their best start since 2013, supported by declining inflation.
Written by: Mohammed Omran
South Africa’s automotive sector continues to deliver exceptional performance in 2026, achieving its best start to the year in more than a decade, despite the sharp rise in global oil prices due to tensions in the Middle East.
This growth is driven by lower inflation rates during the first months of the year, stable borrowing costs, and renewed consumer confidence, at a time when the South African economy still faces structural challenges.
South Africa records its best start to the car market in over a decade despite economic challenges
According to data from NAMSA (the Automotive Business Council of South Africa), new car sales have recorded continuous growth since the beginning of the year. In January 2026, sales rose to 50,073 cars compared to 46,594 cars in the same month of 2025, an increase of 7.5%.
The momentum continued through the following months, with April recording sales of 47,979 vehicles, the best performance for that month since 2013, with an annual growth of 13%.
Sales in May also exceeded the 50,000 mark for the second time this year, reaching 51,071 vehicles, an annual increase of 12.8%, which is also the highest level recorded in May since 2013.
The passenger car sector led this growth, with sales in May reaching 36,871 vehicles, an increase of 16.3% compared to the same month last year.
Sales of small trucks, which are popular with businesses and individuals, also increased by 2.5% to reach 11,251 units, while medium and heavy commercial vehicles recorded growth of 13.6% and 12.9% respectively.
The dealer network accounted for 90.1% of total sales, compared to only 5.3% for the car rental sector.
According to Namsaa, this recovery is due to the improvement in macroeconomic indicators, most notably the decline in inflation to 3.1% during March 2026, which allowed the South African Reserve Bank to maintain relatively easy financing conditions, which boosted household purchasing power and brought back deferred demand to the market.
Toyota continues to lead the South African car market, having sold, including its Lexus and Hino brands, approximately 10,667 vehicles during May 2026, a monthly increase of 4.7%.
Despite these positive results, signs of challenges began to emerge in April, with rising global oil prices due to escalating tensions in the Middle East. This impacted fuel prices and pushed inflation to 41 TP3T in April. In response, the Reserve Bank of South Africa raised its repurchase rate by 25 basis points to 71 TP3T at its meeting on May 28, 2026, in an effort to contain inflationary pressures.
Namsa believes that rising energy costs and tighter monetary policy could affect consumer confidence during the second half of the year, which calls for caution in market expectations in the coming period.
In an attempt to mitigate the effects of rising fuel prices, the government decided to extend and expand the temporary exemption from fuel tax, a move that the sector considered supportive of consumers' ability to cope with living pressures, but its impact remains limited in time with the expectation that costs will continue to rise after it ends.
On the foreign trade front, export performance does not reflect the same momentum as the domestic market. Car exports fell by 4.81 TP3T in May to 29,392 vehicles, following a 41 TP3T decline in April. This is partly attributed to the temporary halt in production of the current generation of the Toyota Hilux in preparation for the launch of the new model, which led to a 42.91 TP3T decrease in light commercial vehicle exports in April. This is compounded by ongoing challenges related to rising protectionist tendencies in foreign markets and the reshaping of global supply chains.
Despite these challenges, the automotive sector remains one of the top performing economic sectors in South Africa during 2026, benefiting from improved domestic demand, while awaiting the impact of global economic developments on the pace of growth in the coming months.
