Car market surges ahead
GIVEN the disaster of a year that 2020 was, it certainly wasn’t hard for the South African new vehicle market to improve on the previous year’s numbers. But those figures, released by Naamsa this week, are still fairly encouraging.
A total of 464 122 new vehicles were sold in Mzansi last year, which represents a 22.1% increase over 2020. However, it could take at least another year for the market to reach pre-pandemic levels, given that vehicle sales declined by 29.2% versus the previous year. Historically speaking, SA car sales are still relatively low given that the market was averaging around 600 000 units a year 10 years ago (572 249 in 2011 and 630 619 in 2012).
Last year’s market growth came in spite of numerous challenges experienced throughout the year, including global supply chain disruptions that led to stock shortages, the civil unrest in July, persistent load shedding and a three-week strike in the engineering sector. Clearly the market wants to grow and is doing so in spite of all of these circumstances and one can only imagine how things would improve if the conditions were actually more ideal.
“A close correlation exists between domestic new vehicle sales and the overall performance of the economy and the new vehicle market’s performance was aligned with the country’s projected GDP growth rate of around 5% for 2021,” Naamsa said in response to last year’s sales figures. “It was a very satisfying performance by an industry that has had to deal with numerous challenges over the course of the year.”
Sadly the export picture was not as positive, with the aforementioned civil unrest, shipping disruptions caused by the Transnet cyber attack and the global semiconductor chip shortage having severely stifled exports in the second half of the year.
The first half of 2021 actually saw export sales on par with pre-pandemic levels, and as a result the year saw an overall year-on-year gain of 8.8%.
Naamsa says it expects the new vehicle market to continue its recovery this year, albeit at a more moderate rate. The industry association predicts an overall market growth of around 8%, given that a GDP growth rate of 1.8% is forecast for the country. This could theoretically bring local vehicle sales past the 500 000 mark once again, if only just.
“Load-shedding will remain an area of great concern in 2022, limiting the economy’s ability to reach full capacity,” Naamsa said.
“Furthermore, the realities of rising interest rates and fuel prices are expected to impact vehicle affordability as household budgets remain under pressure, dimming the hopes of a further strong recovery in the economy any time soon.”