Half a million rand, not too long ago, was the kind of price tag you would have expected to see on a really luxurious premium brand vehicle, but today it buys you South Africa’s average car.

The average purchase price of a new passenger vehicle in 2024 was R490,478, according to industry wide figures released by Toyota at its State of the Motor Industry (SOMI) event held in Johannesburg recently.

However, last year’s figure was 2.27% lower than the R501,901 that the average passenger car retailed for in 2023, indicating a clear buying-down trend as consumers remain constrained by inflated living costs.

At the SOMI presentation, Toyota SA’s CEO Andrew Kirby said the affordability factor was a big influence on the markets in 2024 and will be an even bigger factor in 2025 and beyond.

Kirby also noted a decline in the number of successful credit applications through Toyota’s finance arm, indicating that a great deal of customers are wanting to purchase vehicles but simply are not credit worthy, from an affordability point of view. The carmaker also noted an increase in used car sales through its AutoMark division.

“So if you think about those three factors together, it clearly tends to indicate that affordability is a key component that will be driving our market this year as well,” Kirby stated.

Another significant industry trend was the move towards SUVs, whose share of the passenger vehicle market grew by 2% to 53% in 2024. The big mover here was so-called 'B-segment' compact SUVs, with this segment expanding by 3% last year.

While the R490,000 average new vehicle purchase price straddles the B and C segments, with vehicles such as the Toyota Corolla Cross, Volkswagen T-Cross, Haval Jolion Pro and Jetour Dashing all proving popular in that price range, the market has seen increased activity at the more affordable end of the SUV market, particularly in the sub-R300,000 space.

For instance, Mahindra’s XUV 3X0 has become a formidable player in the segment, with sales averaging over 500 units per month, since launching last year with a vast model range that kicks off at R254,999.