Gradual recovery in SA vehicle sales continues

LAST month, South Africa exported 22 770 new vehicles – some to Namibia, which have either been sold or are yet to get new owners.

Namibia does not manufacture cars and heavily relies on South Africa for stock.

According to statistics for new vehicle sales released by the National Association of Automobile Manufacturers of South Africa (Naamsa) early last week, the 27 770 new cars exported represent and increase of 39,7%, or 6 468 vehicles, compared to the 16 303 vehicles exported in January 2020.

“The current upward momentum in vehicle exports bodes well for a much-improved performance this year, compared to 2020,” said the automobile body in a commentary statement.

While exports soared last month, South Africa’s domestic market was rather tense as new vehicle sales dipped to 34 784 units – a 13,9% decrease in units sold, compared to the 40 413 vehicles sold in January last year.

For exports, however, this growth represents a second consecutive month of solid growth in January 2021.

This gradual rise in exports will greatly depend on an improvement in the economic climate of the South African automotive industry’s main trading partners.

South Africa is still battling Covid-19, with both government and private companies, as well as households under pressure.

The active part of the economy was, however, still able to get 34 784 new vehicles out of the showrooms.

Of this, an estimated 28 716 units, or 82,6%, represented dealer sales, an estimated 11,4% represented sales to the vehicle rental industry, 3,5% sales to government, and 2,5% to corporate industry fleets.

Naamsa in its commentary said for the first quarter of 2021 trading conditions in the new vehicle market are still expected to remain challenging due to slow demand, compared to the pre-Covid-19 first quarter.

“It should be noted that the 2020 new vehicle market recorded its lowest aggregate sales total in 18 years.

The macroeconomic effects of Covid-19 will, therefore, continue to undermine business and consumer confidence and inhibit growth over the medium term,” read the commentary.

There is adequate stimuli in the market, but Covid-19 continues to suppress growth, Naamsa said.

“The current low interest rates coupled with low inflation could be regarded as building blocks to stimulate the new vehicle market. A full recovery to pre-Covid-19 new vehicle sales levels could take around three years,” the commentary read.

In South Africa, the automobile market contributes 6,4% to the overall national output, with at least 4% directly from manufacturing and 2,4% from retail.

The multibillion-dollar sector in 2019 exported vehicles and automotive components worth over N$201 billion, equivalent to at least 15,5% of total exports that year.

Vehicles and components are exported to 151 international markets.

Most Namibian investment companies invest with carmakers in South Africa and the industry’s performance reflects on the value of assets held by Namibians.

Email: lazarus@namibian.com.na | Twitter: @Lasarus_A

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