The National Association of Automobile Manufacturers of South Africa’s (Naamsa) New Vehicle Sales stats for October 2022 show a year-on-year increase of 11.4% – despite the concerns about the logistical disruptions caused by strike action at Transnet during the month and other weakening economic indicators.
The automotive industry contributes 4.3% to South Africa’s GDP, with the export of vehicles and automotive components recording a year-on-year increase of 16,1% to 29,508 units in October 2022 compared to the 25,407 vehicles exported in October 2021. For the year-to-date, vehicle exports were now 14.4% ahead of the corresponding period in 2021.
According to Naamsa, domestic sales of new light commercial vehicles, bakkies and mini-buses recorded an increase of 1,590 units sold from the 11,148 vehicles sold during October 2021 to 12,738 units during October 2022 – representing a year-on-year increase of 14.3%.
Sales for the industry’s medium and heavy truck segments also reflected a positive performance during the month, at 769 units and 1,862 units, respectively. Medium commercial vehicles showed an increase of 177 units sold, while heavy trucks and buses had an increase of 67 vehicles, representing a year-on-year increase of 29.9% and 3.7%, respectively.
The total reported industry sales of 45,966 vehicles comprise dealer sales, rental industry sales, and sales to government and industry corporate fleets.
The breakdown of these four segments is as follows:
Despite the positive numbers for October 2022, the new vehicle market’s resilient performance is decelerating due to the sixth consecutive increase in interest rates since November 2021, said Naamsa.
Growth prospects for the year’s balance remain constrained as higher interest rates and consequent higher debt servicing costs weigh on disposable income, added Naamsa.
According to the Absa Purchasing Managers’ Index [PMI], the six-month index tracking business conditions slipped to 49.2. This is the most pessimistic purchasing managers have been about the outlook since May 2020. The persistence of load-shedding and little hope that this will be alleviated over the near term likely weighed on the sentiment.
The South African Reserve Bank also noted that economic and financial conditions were expected to remain more volatile for the foreseeable future and revised its economic growth outlook for 2022 lower due to load shedding and other weakening economic indicators.
The global economy has entered a period of persistently high inflation and weaker economic growth, impacting demand, said Naamsa.
Nevertheless, growth prospects for domestic vehicle exports remain optimistic as they continued their upward momentum during the month despite the logistical disruptions caused by the Transnet strike and the consequent force majeure declared, said Naamsa.
It added that vehicle exports remain on track to reach a level of well over 300,000 units in 2022.
Read: The 5 cheapest double cab bakkies you can buy in South Africa right now
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