South Africa’s auto trade commerce group NAAMSA has described 2020 as an “extraordinary 12 months that has introduced unprecedented challenges to the nation’s economic system generally and the automotive trade particularly”.
NAAMSA stated the brand new automobile market in December, albeit at a slower tempo, with combination trade new automobile gross sales at 37,493 items declining 10.1% 12 months on 12 months. Final month’s new passenger automotive market and lightweight industrial automobile market mirrored a combined efficiency with a decline of 14.4% for brand spanking new vehicles and a rise of three.2% for mild industrial autos. Gross sales of heavy industrial autos and buses remained weak, declining 15.6%.
Exports elevated 36.3% 12 months on 12 months final month to 18,479 items, 4,919 items increased than in Dec 2019.
Of whole reported trade gross sales of 37,493 autos final month, an estimated 33,750 or 90% represented supplier gross sales, an 6% have been to the rental
trade, 2.5% to authorities, and 1.5% to company fleets.
New automobile gross sales has fallen 2.8% in 2019 and NAAMSA stated “the crippling results of the COVID-19 pandemic” resulted in a large decline in new automobile gross sales of 29.1% to 380,449 items in 2020.
“Car gross sales are linked to the power of the economic system and the pandemic not solely deepened an current financial recession, however its extreme impression resulted in that the home new automobile market in 2020 dropped again to the degrees of twenty years in the past,” the organisation stated in a press release.
“The numerous fall in combination new automobile gross sales occurred regardless of a 300-basis level rate of interest reduce in the course of the 12 months to a close to 50-year low. South Africa entered a recession earlier than the outbreak of COVID-19, which suggests center class disposable revenue was already below strain previous to the
nationwide lockdown,” NAAMSA stated.
“The automobile rental trade, which is a serious seasonal contributor to the brand new automobile market, additionally successfully remained dormant because of the lockdown restrictions on enterprise journey and tourism for a lot of the 12 months.
“Present market circumstances within the passenger automotive and lightweight industrial automobile markets continued to be characterised by a shopping for down pattern with gross sales of pre-owned autos being essentially the most attractive choice within the present economic system. The premium automotive phase had continued to expertise important strain in 2020.
“Though 2020 gross sales of medium and heavy industrial autos confirmed indicators of resilience, the weak efficiency in comparison with 2019 additionally mirrored the impression of the COVID-19 nation lockdown restrictions coupled with the continuing weak macro-economic local weather within the nation.”
Exports declined 29.8% to 271,819 items in 2020.
NAAMSA stated COVID-19 had impacted financial exercise in each area of the world and South African automobile exports had subsequently been affected by the autumn in international automobile demand due to the impression of the pandemic.
“The efficiency of car exports stays reliant on the efficiency and path of worldwide markets and over the course of 2021 will stay linked to the period and impression of latest COVID19 waves,” NAAMSA stated.
“Common expectations are for South Africa’s economic system to rebound sharply in 2021, from a really low base in 2020. Nevertheless, robust months are nonetheless forward earlier than enterprise and client confidence will probably be rebuilt. Prospects for quicker development over the medium time period are prone to be constrained by new COVID-19 waves accompanied by stricter lockdown measures, wanted fiscal tightening and chronic power-supply disruptions.
“The brand new automobile market is predicted to nonetheless face extreme challenges of sluggish demand, rand trade fee volatility and destructive enterprise and client sentiment in the course of the first quarter of 2021.
“Though the present low rates of interest, coupled with low inflation, might be thought to be a constructing block to stimulate the economic system, a automobile stays a big-ticket buy consideration for any family funds and is consequently a key indication of market confidence. The main focus for the trade now must shift to resilience, restoration, and creating methods to cope with new enterprise and client behaviour.
“The event of examined and confirmed vaccines and their distribution would rework issues for the higher, particularly for the journey and leisure sector which might lead to a marked restoration within the automobile rental trade in 2021.”
A year-on-year enchancment of round 15% in new automobile gross sales quantity was projected for 2021, NAAMSA stated. Exports have been seen rising round 20%, and an enchancment in trade automobile manufacturing of about 18% was projected for 2021.
