Johannesburg- The South African domestic motor industry is showing signs of life after difficult two years.
Data from the National Association of Automobile Manufacturers of South Africa (Naamsa) show that total vehicle sales in South Africa decreased to 41 035 units in October from 43 146 units in September of 2021.
NAAMSA attributed the month-on-month decline to the three-week strike in the steel and engineering sector, as well as the return of acute load-shedding.
However, new vehicle sales registered strong growth year on year.
The new passenger car market recorded sales of 27 496 units last month, an increase of 815 cars, compared to the 26 681 new cars sold in October last year.
Domestic sales of new light commercial vehicles, bakkies and mini-buses came in at 11 188 units in October, an increase of 1 535 units, from the 9 653 light commercial vehicles sold during October 2020.
Mark Dommisse, the chairperson of the National Automobile Dealers’ Association, said retail sales of 41 035 vehicles represented a 6.1% improvement on the figure for the same month a year ago, with franchised dealer networks responsible for 82.5% of these sales.
“This was a very satisfying performance by an industry that has had to deal with many economic challenges, as well as ongoing delays in getting vehicles, components and replacement parts from the ports, which are slowly recovering from the congestion of the last few months,” Dommisse said. However, he said the record fuel price hike announced on Monday will hurt the industry.
“Everything we use and consume is transported, which will have the effect of inflationary pressure while oil prices are very high, leaving less cash in the bank for already cash-strapped consumers. In addition, it is difficult to predict what is in store for us, when Enoch Godongwana, the Minister of Finance, makes his first budget speech next week.”
In 2020, the broader South African automotive industry’s contribution to gross domestic product (GDP) stood at 4.9%, down from 6.4% in 2019, reflecting the severe impact of Covid-19 on automotive manufacturing and retail due to the country’s lockdown restrictions.
As the largest manufacturing sector in the country’s economy, a substantial 18.7% of value-addition within the domestic manufacturing output was derived from vehicle and automotive component manufacturing activity. The industry employs about 457 000 workers.
Michael Mabasa, the CEO of Naamsa, said the domestic automotive industry will continue to benefit from the strong rebound in global economic activity and favourable conditions abroad.
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