Bright future predicted for SA vehicle exports
While business and consumer confidence levels will continue to be affected by South Africa’s weak economy and increased pressure on household income, improved demand for new vehicles outside the country is projected following the 2019 elections.
That is according to the National Association of Automobile Manufacturers of South Africa (Naamsa) which said vehicle exports were expected to continue their strong upward momentum for the rest of the year.
“Expectations for 2019 are for the new vehicle market to continue moving sideways in the domestic market but for further export sales growth,” it said.
“Domestic new passenger car sales declined but commercial vehicles performed better year on year,” Naamsa said in its quarterly view. The report stated that SA’s share of global new vehicle production already showed an improvement from 0.62% in 2017 to 0.64% in 2018. Global new motor vehicle production in 2018 declined to 95,634,593 vehicles (2017 had 96,671,427 units).
This represents a decrease of 1,036,834 vehicles produced, or 1.1%, compared with the 96.67 million new vehicles produced during 2017.
South African vehicle production increased to 610,854 vehicles in 2018 from 601,338 units produced in 2017 – an improvement of 9,516 vehicles or +1.6%.
Automotive Industry Development Centre East Cape board chair Weza Moss said the marginal increase was likely due to a number of factors, including policy stability within the country.
Moss said the quality of work coming out of SA in terms of production output was at a global standard and the country was actively competing at a global level.“It seems the global market has been listening kindly to what President Cyril Ramaphosa has been saying about the sector and responding to that.“With the current transformation programmes in place such as the 2035 master plan, the global village understands them and these programmes provide global investors with some kind of direction.”The objectives of the automotive 2035 master plan speak to increasing production output from 0.6% to 1% [of global output] – doubling jobs by 2035 to 224,000 from 112,000 – and improving the competitive levels of suppliers.Moss said SA’s automotive sector, and the country at large, would be watched more carefully following the election, but showcasing stability would be key towards further growth.“Stability becomes key, acceptance of the outcome of the results and reshuffling of the cabinet is going to be very important to maintain policy stability.“South Africa is poised to be a very strong player in the automotive business but, when you look at the rest of Africa – Ghana, Nigeria, Kenya, Tunisia – they are rolling out the red carpet for global investors in the automotive sector.“It is then so important that SA doesn’t become complacent,” he said.