After a disastrous 2020 that saw South African vehicle sales plummet by 29 percent to just 380 206 units as the Covid-19 pandemic ravaged the economy, the industry is poised for growth in 2021 and 2022.
In its latest quarterly review of the South African motor industry, Naamsa has predicted that the overall new vehicle market will grow by 15 percent to 438 000 units in 2021, and then by another 5,7 percent to total 463 000 units in 2022. Although this is encouraging, it will however take years for the market to recover to pre-Covid levels when vehicle sales averaged around 540 000 units a year.
Bakkies and other light commercial vehicles will be leading the comeback charge, with LCV sales projected to grow by 16,3 percent in 2021 and 6,2 percent in 2021. Passenger car sales, on the other hand, are expected to grow by 15,5 percent this year and 5,2 percent next year.
According to Naamsa, motor company bosses generally agree that the automotive industry is poised for much improved business conditions over the next six months.
“CEOs across all vehicle manufacturing segments as well as the CEOs of the independent vehicle importers are by and large positive about a robust recovery in the domestic as well as global new vehicle market over the next six months in line with the economic rebound in South Africa and international markets, from the very low base in 2020,” Naamsa said.
“Considering the close correlation between new vehicle sales and the country’s GDP growth rate projected to be more than 3% in 2021, a healthy rebound in the new vehicle market
performance is anticipated, from the very low base in 2020,” the industry body added.
However, structural constraints in the economy, together with the country’s growing debt and ongoing electricity woes will ensure that it’s not a quick recovery to pre-Covid levels. Vehicle stock shortages in the coming months, largely due to the semi-conductor chips crisis, will not help the situation.
Local vehicle production is expected to grow from the 447 218 units recorded last year to 523 700 in 2021, a 17,1 percent increase, while exports are projected to grow by 16.3 percent, from 271 228 to 315 700.
