New vehicle sales predictively showed growth in 2021

GIVEN the disastrous effects of the pandemic in 2020, it certainly wasn’t tough for the new vehicle market to improve on the previous year’s numbers.

In 2021, according to Naamsa's (The National Association of Automobile Manufacturers of South Africa) records, a total of 464 122 new vehicles were sold in South Africa - a 22.1% increase over 2020.

However, it could take at least another year for the market to reach pre-pandemic levels considering vehicle sales had declined by 29.2% compared with the previous year.

Historically speaking, South African 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 also came against the backdrop of global supply chain disruptions that led to stock shortages, civil unrest, persistent load shedding, and a threeweek strike in the engineering sector.

'A close correlation exists between domestic new vehicle sales and the overall performance of the economy,' reads the Naamsa response to last year’s sales figures.

'The new vehicle market’s performance was aligned with the country’s projected GDP growth rate of around 5% for 2021.

'It was a very satisfying performance by an industry that has had to deal with numerous challenges over the course of the year.'

Exports down

However, 2021's export picture was not as positive. The civil unrest, shipping disruptions caused by the Transnet cyber attack, and the global semiconductor chip shortage 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 stated that it expects the new vehicle market to continue its recovery this year, albeit at a more moderate rate.

An overall market growth of around 8% is predicted, 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.

'Loadshedding will remain an area of great concern in 2022, limiting the economy’s ability to reach full capacity,' Naamsa added.

'Furthermore, the rising interest rates and fuel prices are expected to impact vehicle affordability as household budgets remain under pressure, dimming the hopes of a strong recovery in the economy anytime soon.'

Export sales are expected to grow by around 15% due to more favourable conditions abroad, as well as the introduction of new-generation export models such as the facelifted Polo, new C-Class and Ranger bakkie.

Naamsa has not released individual vehicle model sales figures for 2021.