South Africa’s car market has shifted: here’s what to expect in 2022

Data from the National Association of Automobile Manufacturers of South Africa (Naamsa) shows that the new vehicle market declined during December 2021, capping a year of challenges that included additional Covid-19 waves and variants, and several domestic socio-economic issues.

“The South African automotive industry, like many other businesses, had to learn to quickly adapt to constantly changing regulations at the different alert levels. We had to embrace remote and flexible working environments and we had to find new ways to operate in a dynamical digital economy,” Naamsa said.

The new vehicle market declined during December 2021, with aggregate industry new vehicle sales at 35,948 units recording a decline of 1,302 vehicles or a fall of 3.5% compared to the total new vehicle sales of 37,250 units in December 2020.

The December 2021 new passenger car market and light commercial vehicle market reflected a mixed performance with a year-on-year volume increase of 1.7% for new passenger cars and a decline of 16.6% for light commercial vehicles, while heavy commercial vehicles and buses were marginally down by 0.7%.

Out of the total reported industry sales of 35,948 vehicles, an estimated 33,160 units or 92.2% represented dealer sales, 4.9% represented sales to the vehicle rental industry, 1.9% to the government, and 1% to industry corporate fleets.

The following table summarises annual aggregate industry sales by sector since 2016

Following the massive Covid-19 pandemic-related decline in new vehicle sales of 29.2% from 536,612 units in 2019 to 380,206 units in 2020, the new vehicle market reflected a strong rebound increasing year-on-year by 22.1% to 464,122 units in 2021.

A close correlation exists between domestic new vehicle sales and the overall performance of the economy and the new vehicle market’s performance was aligned with the country’s projected GDP growth rate of around 5% for 2021, Naamsa pointed out.

“It was a very satisfying performance by an industry that has had to deal with numerous challenges over the course of the year, ranging from global supply chain disruptions, insufficient model availability, persistent load-shedding, escalating logistics cost, as well as several domestic shocks,” it said.

Economic disruptions include July 2021’s civil unrest, a cyberattack on Transnet operations, a three-week strike in the steel and engineering sector, the adjusted alert level 4 lockdown restrictions during the second half of the year as well as record fuel prices and a first interest increase in three years.

Overall, Naamsa said that market conditions in the new passenger car and light commercial vehicle market continued to be characterised by a buying downtrend, with sales of pre-owned vehicles offering the most enticing option during the year.

Sales of medium and heavy commercial vehicles also reflected signs of resilience and the sales performance mirrored the improved macro-economic climate in the country, the association said.

Vehicle exports at 295,268 units in 2021 reflected an increase of 23,980 vehicles or a gain of 8.8% compared to the 271,288 vehicles exported in 2020, Naamsa said.

Looking ahead into 2022, it said that the performance of vehicle exports remains reliant on the performance and direction of global markets. Over the course of 2022, the domestic automotive industry’s vehicle exports are expected to benefit from favourable conditions abroad as well as several new model introductions by major vehicle exporters.

However, Naamsa said that Covid-19 has increased the levels of uncertainty and its effects will be felt for years to come.

“The domestic automotive industry is under no illusion that the pandemic will continue to have a significant impact on the economy and automotive industry in 2022 but, at the same time, is geared for any opportunities that may arise as businesses adapt to the changing environment,” it said.

The association said that many Covid-19 disruptive elements are expected to remain in play in 2022 and prevailing market conditions will continue to be hampered by escalating cost increases and supply chain disruptions, such as the global semi-conductor shortages impacting the availability of certain models.

“Load shedding will remain an area of great concern in 2022, limiting the economy’s ability to reach full capacity. Furthermore, the realities of rising interest rates and fuel prices are expected to impact vehicle affordability as household budgets remain under pressure, dimming the hopes of a further strong recovery in the economy any time soon,” it said.

While the new vehicle market has seen substantial growth since the initial shock, it has not been sufficient to return to pre-Covid-19 levels in 2021. Naamsa said that a sustained higher domestic economic growth rate is essential to support higher domestic new vehicle sales volumes.

“However, with a GDP growth rate forecast of a moderate 1.8% in 2022, the new vehicle market is expected to continue its gradual recovery during the year, but at a slower pace and at this stage a year-on-year improvement of around 8% in aggregate new vehicle sales volumes is projected for 2022.”

Factoring in the expected year-on-year improvement in vehicle exports of around 15%, an improvement in industry vehicle production of about 17% is projected for 2022, the group forecasts.


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South Africa’s car market has shifted: here’s what to expect in 2022