Highs and lows in SA motor industry’s export performance
Vehicle exports, measured in both number and value, have plunged
In a classic case of “Do you want the good news or the bad news first?”, the SA motor industry’s 2020 export performance was one of extreme highs and lows.
Vehicle exports, measured in both numbers and value, plunged. As a result, so did the industry’s contribution to SA’S manufacturing output and GDP.
At the other end of the scale, exports of vehicle components hit an all-time high. Local producers of catalytic converters, which reduce exhaust emissions, could barely keep pace with overseas demand.
Multinational motor companies showed their faith in SA by investing a record R9.2bn in their local operations. And the best news of all: the industry’s 2020 trade surplus was a record R48.2bn, R175.7bn of exports vs R127.5bn of imports.
Exports may have fallen by R26bn from 2019 but imports fell faster, by R47.1bn. The previous record surplus, R27.1bn, was set in 2019. The numbers are recorded in the 2021 edition of the Automotive Export Manual, published on Friday by the government’s Automotive Industry Export Council.
Naturally, the cause of the unprecedented extremes was the Covid-19 pandemic, which played havoc with both local and global demand. Export council executive manager Norman Lamprecht, who compiled the manual, writes in it: “For the global automotive industry, the pandemic has been the biggest deterrent to growth over the past century.
“Characterised by supply chain bottlenecks and dwindling new-vehicle sales … the impact of the multi-wave pandemic on global markets is yet to be fully comprehended.”
For SA, however, the 2020 impact is clear. Vehicle exports, which swallow nearly twothirds of local production, fell 30% compared with 2019, from 387,092 to 271,288.
Values fell from R148bn to R121.2bn. The number of imported vehicles also fell by about 30%, and their value from R64bn to R39bn. Components exports rose from R53.7bn to a record R54.5bn.
This was due mainly to the foreign growth in demand for platinum-based converters, particularly from Europe, where many countries are implementing new automotive environmental standards. Converter export values grew from R20.46bn in 2019 to R26bn in 2020, aided partly by higher platinum prices.
Converters accounted for 47.7% of the value of total SA components exports. The next biggest contributors were engine parts, worth R3.3bn, and tyres at R2.7bn.
With SA vehicle production shrinking from 631,921 to 447,218, demand for imported components also fell, from R110.6bn to R88.4bn.
The EU remained SA’S biggest export market in 2020, taking R105bn of vehicles and components, or 59.8% of SA’S total exports.
This included 75% of all exported vehicles. The UK, then still in the EU, was the biggest market with 67,798, followed by Germany (25,736), Japan (23,645), France (13,956) and Australia (13,041). Africa was the industry’s second largest destination for automotive products, buying R29.6bn of goods.
Predictably, Germany remained overwhelmingly SA’S biggest automotive trading partner in 2020. Of R101.4bn total trade, SA exported R56.1bn and imported R45.3bn. Next was the US, with the R25.5bn split between R14.5bn exports and R11bn imports.
Of the R22.6bn of trade with Japan, SA exported R6.1bn and imported R16.5bn.
Thailand, which provides many of the components built into Sa-made bakkies, sold R19.1bn of goods to SA and imported R1.9bn.
The mismatch with China was even greater. Of the total R18.5bn trade, SA exported R421m and imported R18.1bn.
India, which produces lowcost vehicles for many of the world’s motor companies, was the major exporter of vehicles to SA in 2020, with 87,953, followed by Japan (22,280), Germany (21,699) and South Korea (14,854).
The manual says the decline in local vehicle production and sales reduced the motor industry’s share of total SA manufacturing output from 27.6% to 18.7% and its contribution to GDP, including both manufacturing and retail, from 6.4% to 4.9%.
Lamprecht predicted an 18% increase in vehicle exports in 2021 but warned it could take three years for numbers to recover to pre-covid levels. He said: “The world economy is projected to recover in 2021, while it is also expected that SA’S economic growth rate will rebound, setting the stage for a robust recovery.”