South Africa’s economy grew by 1.1% in 2025, reflecting gradual progress despite persistent economic challenges, according to the National Automobile Dealers’ Association (Nada).
While the growth rate remains modest, the association says the latest economic data points to resilience across several sectors of the economy following years of disruption caused by energy shortages, infrastructure bottlenecks and broader global economic pressures.
However, Nada has warned that the economic outlook for 2026 may remain challenging, particularly as businesses and consumers grapple with rising input costs.
Electricity tariff hike blow
Among the key concerns is the recent decision by the National Energy Regulator of South Africa (Nersa) to approve electricity tariff increases for Eskom customers.
From April 1, electricity tariffs will increase by 8.76% for Eskom direct customers, while municipal customers will face a 9.01% increase from July 1 2026.
Nada says electricity remains a critical cost component across many sectors of the economy, including automotive retail, manufacturing, logistics and services.
As a result, higher electricity tariffs are expected to feed through the entire value chain, increasing operational costs for businesses and potentially affecting prices for consumers.
Fuel price sting
At the same time, rising fuel prices continue to place pressure on transportation and distribution costs across the economy.
Together, these cost increases highlight the importance of maintaining an economic environment that supports business sustainability and consumer confidence.
For the automotive retail sector, which consists largely of small and medium enterprises, stable operating conditions remain vital.
Vehicle dealerships play an important role in supporting employment, investment and mobility across the country, while also acting as a key link between vehicle manufacturers and consumers.
Industry leaders say managing rising operational costs while continuing to provide value and service to customers will remain a key challenge in the year ahead.
Nada’s optimism
Despite these pressures, Nada remains cautiously optimistic about the resilience of South Africa’s automotive retail sector and the broader economy.
“South African businesses and consumers have consistently demonstrated resilience in the face of challenging conditions,” said Brandon Cohen, chairperson of Nada.
He added that continued focus on improving infrastructure, ensuring energy stability and maintaining policy certainty would play a crucial role in supporting stronger economic growth.
According to Cohen, predictable energy supply and pricing – combined with ongoing economic reforms – will be essential to unlocking stronger growth and supporting both businesses and consumers in the year ahead.
