Record ex­ports, but new unit SA sales de­cline

Pretoria News - - BUSINESS REPORT - ED­WARD WEST ed­ward.west@inl.co.za

VE­HI­CLE ex­ports were likely to reach a third con­sec­u­tive record-high in 2020 even as sales of new units lo­cally were likely to de­cline, the Na­tional As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers of SA (Naamsa) said yes­ter­day.

Africa’s largest car­maker is pro­jected to ship 391 900 ve­hi­cles this year, up from the record 387 125 units in 2019, Naamsa said in its 2019 fourth-quar­ter in­dus­try re­port. The surge in ex­ports would po­ten­tially off­set the con­tin­ued de­cline in do­mes­tic new ve­hi­cle sales, which were ex­pected to fall to 525 500 units from 536 611 in 2019.

De­mand for new ve­hi­cles has been hit by re­ces­sion­ary eco­nomic con­di­tions and de­pressed con­sumer and busi­ness sen­ti­ment in the coun­try.

“The new ve­hi­cle mar­ket is ex­pected to face fur­ther con­sol­i­da­tion, un­til South Africa breaks out of its low­growth trap and the econ­omy is put on a higher-growth path,” said Naamsa chief ex­ec­u­tive Michael Mabasa.

Naamsa ex­pected the econ­omy to ex­pand by 0.8 per­cent in 2020, and con­sumers were likely to con­tinue to buy cheaper mod­els or de­lay pur­chas­ing de­ci­sions un­til there was greater eco­nomic sta­bil­ity.

The econ­omy hasn’t ex­panded by more than 2 per­cent an­nu­ally since 2013, and the govern­ment doesn’t see it reach­ing that level by 2022.

Fourth quar­ter 2019 in­dus­try em­ploy­ment re­flected an in­crease of 187 jobs to 30 666 po­si­tions at end De­cem­ber, the re­port showed. In­dus­try ca­pac­ity util­i­sa­tion lev­els in the fourth quar­ter con­tin­ued to re­flect the pre­vail­ing busi­ness con­di­tions, with the pas­sen­ger-car ca­pac­ity util­i­sa­tion en­hanced by higher pro­duc­tion to ac­com­mo­date record ve­hi­cle ex­ports. Ve­hi­cle man­u­fac­tur­ers spent the sec­ond high­est cap­i­tal ex­pen­di­ture on record in 2019 at R7.27 bil­lion.

Global new mo­tor ve­hi­cle pro­duc­tion in 2019 de­clined 5.3 per­cent to 91 123 747 ve­hi­cles, com­pared with 2018. How­ever, South African ve­hi­cle pro­duc­tion in­creased by 3.6 per­cent to 631 983 ve­hi­cles in 2019 from 610 060 units pro­duced in 2018.

South Africa’s share of global new mo­tor ve­hi­cle pro­duc­tion in 2019 im­proved 0.69 per­cent from 0.64 per­cent, with the coun­try’s rank­ing re­main­ing at 22nd po­si­tion in the world. In light com­mer­cial ve­hi­cle pro­duc­tion, South Africa ranked 14th glob­ally, with a mar­ket share of 1.26 per­cent.

Ve­hi­cle ex­ports into Europe, and North and South Amer­ica re­flected growth in 2019. Europe ac­counted for 73.8 per­cent of to­tal ve­hi­cle ex­ports.

“Africa re­mains a pri­or­ity fo­cus for the do­mes­tic au­to­mo­tive in­dus­try and the low mo­tori­sa­tion rate on the con­ti­nent, grow­ing mid­dle-class and the African Con­ti­nen­tal Free Trade Area should stim­u­late fu­ture de­mand, al­beit from a low base,” Naamsa said.

Ex­ports to North Amer­ica had de­clined sub­stan­tially since 2017, at­trib­uted to the same BMW and Mercedes-Benz ranges man­u­fac­tured in the US, once the top ex­port mar­ket for pre­vi­ous mod­els made in South Africa.

Sup­plied

GLOBAL new mo­tor ve­hi­cle pro­duc­tion in 2019 de­clined 5.3 per­cent to 91 123 747 ve­hi­cles, com­pared with 2018. |

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