CAUTIOUSLY OPTIMISTIC

It arrived, not with a bang, but with a whimper, renewed hope that the South African economy might just get the opportunity to pull itself up by its bootstraps and be rejuvenated once again. Of course, when the economy does well, perhaps even thrives, the many sectors of our economy that depend on the consumer for viability, prosper along with the mainstream.

By their structure, some industries, such as the motor industry, are more intricately woven into the fabric of the economy than others. The motor industry not only provides employment, supports a multitude of small businesses around it, and provides a service to the country at large, it also plays a vital role in the day-to-day functioning of the country. Few other industries provide economic maintenance as the motor industry.

It’s for this reason that the motor industry is itself a barometer of the health of the economy, one that reacts within weeks to the slightest disruptions of sentiment that the economy may experience. Or put differently, when the economy sneezes the motor industry catches a cold.

And that is by no means a good thing, given the stratospheric influence that the motor industry has on the economy.

On the opposite end of the spectrum, when sentiment turns, the fortunes of the industry and those that depend on it for their livelihood turns with it.

This is why, during mid-December 2017 I was, like many industry observers, eager to hear the outcome of the governing party’s elective conference. With one eye on the television and one on the markets, it was plainly evident that, by the time the organisation had elected a new leader, the markets rose in pathos with a relieved nation.

Almost immediately the currency markets improved, long-term bonds improved, the JSE responded by trading unprecedented numbers, and a battle-weary nation heaved a collective sigh of relief.

Being a traditionally slow time of the year for the motor industry there was not much in the way of a structured response, but we should see new car sales numbers rise at the end of January and February this year on the back of renewed positive sentiment in the economy. But don’t go thinking that we’re out of the woods just yet. Many essential interventions need to still take place, just to return the economy to an even footing. Once this has happened, and we start seeing better growth numbers than the perpetual sub-1% of 2017, we might begin to realise the potential of the economy and see critical improvements in the motor industry in the short- to medium term.

Until then, buckle up, keep your head above water, and remain, as I, cautiously optimistic.

Drive on!