Auto industry achieves R21bn positive trade balance
Record vehicle exports helped take South Africa’s auto trade balance to a positive R21.1 billion last year from R19.6 billion in 2022 – an increase of 7.6%.
Norman Lamprecht, chief trade and research officer at automotive business council Naamsa, said this week vehicle exports have remained the key driver for the automotive industry’s healthy trade balance since 2008.
“Despite a constrained economic environment undermining the domestic new vehicle market’s ability to fully recover to pre-pandemic levels in 2023, record-high vehicle exports ensured that the automotive industry outperformed the rest of the manufacturing sector,” he said.
“As the largest manufacturing sector in the country’s economy, a substantial 21.9% of value addition within the domestic manufacturing output was derived from vehicle and automotive component manufacturing in 2023, while the broader automotive industry’s contribution to the GDP comprised 5.3% – 3.2% manufacturing and 2.1% retail.”
More numbers
The industry has now achieved a positive trade balance since 2015, according to the annual Automotive Trade Manual.
However, the automotive trade balance figures exclude automotive aftermarket parts, which recorded a negative trade balance of R99.5 billion in 2023.
Automotive export revenue grew by 19.1% to a record R270.8 billion last year from R227.3 billion in 2022.
Lamprecht said this could mainly be attributed to a record vehicle export performance, resulting in vehicle export revenue increasing by 29.9% to R203.9 billion in 2023 from R157.0 billion in 2022.
He said automotive component exports decreased by 4.8% to R66.9 billion last year from R70.3 billion in 2022, which is in line with lower catalytic converter exports.
The value of automotive imports increased by 20.2% to R249.7 billion in 2023 from R207.7 billion in 2022.
Lamprecht attributed this mainly to the 34.3% year-onyear increase in the imports of original equipment components last year, which was to accommodate new model launches by some original equipment manufacturers (OEMs) in the domestic market.
Automotive Masterplan
Lamprecht said the objectives of the South African Automotive Masterplan (SAAM) 2021-2035 are to increase vehicle production to 1.4 million vehicles per annum by 2035 and raise localisation levels in SA-manufactured vehicles from an average of 40% to 60% by 2035, which will contribute to decreasing reliance on imported components in the future.
Exports to the EU, the domestic automotive industry’s top export region, increased to a record R147.1 billion in 2023, while exports to Africa, its second-largest export region, rose to a record R42.8 billion.
Lamprecht said that given the high export exposure of the domestic automotive industry to the EU, legislation to ban the sale of new internal combustion engine (ICE) vehicles in the EU and UK by 2035 requires a speedy approach because of the required timeframe within which SA’s automotive industry must respond to this challenge.
EV white paper
Speaking at the launch of the latest Industrial Policy and Strategy Review on Tuesday, Minister of Trade, Industry and Competition Ebrahim Patel said the South African automotive industry experienced some noteworthy developments last year, and the pulse of this dynamic sector accelerated with his department’s release of the Electric Vehicle White Paper in November last year.
Patel said the white paper outlines a comprehensive electric vehicle roadmap for SA and the structure of a suite of policy interventions tailored to the automotive industry.