naamsa president talks sales in 2022/2023

Sales will also only reach pre-COVID-19 levels again in 2023, says Hill, who is also the MD of Ford South Africa, at a naamsa CEO dinner last week.

Hill says the automotive industry, locally and globally, has not been insulated from the impact of COVID-19 as government restrictions to keep communities safe impacted on the trading activities of vehicle manufacturers' customers, which led to changes in consumer purchasing behaviours and volatile new vehicle sales.

He says this year was also characterised by a number of adverse events, with severe consequences for the automotive industry, including the unrest and protests in July in KwaZulu-Natal and Gauteng, Eskom power supply challenges and the five-week National Union of Metalworkers of South Africa (Numsa) strike in the steel sector, which resulted in delays in the delivery of some mission-critical and locally produced components.

Hill says the new-vehicle market has achieved a robust recovery year-to-date to October 2021 of 27.2% compared to the severely COVID-19-affected corresponding period 2020.

“naamsa’s initial projection for 2021, in close correlation with the projected GDP growth rate of 3.3% for the year at the time, was for a year-on-year increase of just over 15% compared to 2021.

“The GDP growth rate forecast for 2021 for South Africa has been revised upward a few times to around 5.2% and it seems as if the full year 2021 new vehicle market will, in line with the improved economic climate, reflect an increase of around 20% year-on-year.

“This is, however, still around 15% below the pre-COVID-19 level of 2019,” he says.

Hill says that since 75% of passenger cars are imported, vehicle imports are expected to increase in line with the recovery in the domestic new-vehicle market while vehicle exports are expected to reflect strong upward momentum in 2022 and 2023, which will support vehicle production.

He says vehicle exports suffered this year from, among other factors, the aftermath of the cyberattack on Transnet’s operations and the Force Majeure declared during the third quarter of 2021.

“Consequently, from being 65.8% ahead for the first six months of 2021 compared to the same period in 2020 and on par with the record export performance of 2019, vehicle exports ground to a halt during the third quarter to now only being 24.2% ahead for the first nine months of 2021 compared to the same period in 2020 – still 22.5% below the pre-COVID-19 level of the corresponding period in 2019,” he says.

However, Hill says it is anticipated that several new model introductions by major vehicle exporters in 2021 and 2022, along with increased demand linked to the favourable economic conditions abroad, will provide the impetus for vehicle exports to regain their strong upward momentum over the short to medium term.