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APRIL NEW VEHICLE SALES NOT A SUPRISE
Bassonia Webmaster         Source: Motorpress / NAAMSA
APRIL NEW VEHICLE SALES NOT A SUPRISE

PRETORIA: Tuesday, May 05, 2020: The National Association of Automobile Manufacturers of South Africa [NAAMSA] said that the April new vehicle sales figures were not a surprise and were expected.

“The 98,4% drop in new vehicle sales is a true reflection of the South Africa economy at the back of a 35-day hard lockdown where economic activity was not possible because the country prudently elected to support the imperative to contain the COVID-19 virus and save lives”, said Michael Mabasa, NAAMSA CEO.

Vehicle and automotive component production, as the bedrock of the country’s manufacturing sector, will gradually ease back into production because vehicle production will resume under strict risk-adjusted measures, hygiene and social distancing requirements stipulated in the regulations to ensure the safety of all employees, customers, suppliers and of everyone who access the sector.

New vehicle sales statistics for April 2020 reflects the expected decline of 98,4% [36 213 units] from the 36 787 vehicles sold in April last year to the aggregate domestic sales of 574 units in April 2020. Equally, export sales at 901 units also registered a huge fall of 31 928 units or a decline of 97,3% compared to the 32 829 vehicles exported in April last year. Overall, out of the total reported industry sales of 574 vehicles, an estimated 275 units or 47,9% represented dealer sales, 37,8% sales to government, an estimated 12,4% represented sales to the vehicle rental industry, and 1,9% to industry corporate fleets.

The April 2020 new passenger car market had registered a decline of 24 877 cars or a fall of 99,6% to 105 units compared to the 24 982 new cars sold in April last year. Domestic sales of new light commercial vehicles, bakkies and mini-buses at 318 units during April 2020 had recorded a significant decline of 9 494 units or a fall of 96,8% from the 9 812 light commercial vehicles sold during the corresponding month last year.

Sales for medium and heavy truck segments of the industry also performed poorly and at 64 units and 87 units, respectively, reflected a substantial decline of 515 vehicles or a fall of 88,9% in the case of medium commercial vehicles, and, in the case of heavy trucks and buses a decline of 1 327 vehicles or a fall of 93,8 % compared to the corresponding month last year. The performance of vehicle exports over the course of 2020 remains linked to the duration of the COVID-19 pandemic and its impact on the global economy.

The April new vehicle sales and export figures represent a barometer of the COVID-19 impact on the automotive industry and the economy at large. Businesses and consumers are currently uncertain on what the future holds through the lockdown restrictions, with unemployment rate increases, negative exchange rate impact, negative annualised GDP growth rate, and Moody’s and Fitch’s rating downgrade all putting pressure on disposable income and debt levels. The business activity index of the Absa Purchasing Managers’ Index [PMI] survey crashed to an all-time low of a mere 5.1 index points in April.

The decline means that manufacturing output came to a near standstill during the nationwide lockdown. The PMI survey reflects the immediate, devastating impact the lockdown had on manufacturing output and overall demand. All of this translates into low business and consumer confidence, which will cause a delay in big purchases such as vehicles. While some easing of restrictions from May should aid a slow recovery in coming months, a lot of manufacturing capacity will remain idle for some time.

The industry is under no illusion that this is going to be a very difficult year ahead. However, the cut of the interest rate by a further 100 basis points during April 2020 will not only assist indebted consumers and businesses in the short term, but also help restarting industry sales once the country resumes business. The reduction in fuel prices will also contribute while the oil price remains low.

The performance of exports would remain a function of the performance and direction of global markets. The global automotive industry has been hit hard by the Coivd-19 pandemic with a significant fall in demand forecast for all the major automotive regions in 2020. The impact of the fall in global vehicle demand would become clearer in the domestic industry’s export sales over the short to medium term.

IMPORTANT NOTE TO THE MEDIA - NAAMSA has introduced a new way of reporting and is currently renovating its data management offering to the market and will be introducing a number of value adding services that will be announced shortly. The total sales by individual model breakdown has not disappeared from the system and this will still be available in a more granular detail once our new website is officially launched later this year. It is worth noting that NAAMSA will also introduce Associate Membership and offer tangible benefits such as access to more detailed information, visibility to key industry issues, business exposure and many other benefits.


South Africa is the only country on the African continent that hosts seven major auto manufacturers;
the automotive industry contributes 6.9% to GDP [4.4% manufacturing and 2.5% retail];
the automotive industry is the largest manufacturing sector in the country’s economy;
total automotive revenue in South Africa amounted to R503 billion in 2018;
in 2018, the export of vehicles and automotive components reached a record amount of R201,7 billion, equating to 15,5% of South Africa’s total exports;
the industry accounts for 30.1% of the country’s manufacturing output;
South Africa is an export-oriented industry and has exported 64,1% of light vehicle production in 2019;
a record 387 125 vehicles worth a record R148,0 billion, along with a record R53,7 billion in automotive components were exported in 2019;
exports to the European Union comprised 285 599 units or 73,8%;
vehicles and components are exported to a record 151 international markets;
we are the country’s 5th largest exporting sector out of all 104 sectors and accounts 13.9% of total exports;
a substantial 27,6% of value addition within the domestic manufacturing output was derived from vehicle and automotive component manufacturing activity;
the manufacturing segment of the industry presently employs more than 112,250 people across its various tiers of activity [from component manufacturing to vehicle assembly];
combined with the industry’s strong multiplier effect, the industry is responsible for approximately 457,000 jobs across the South African economy’s formal sector.

NOTES FOR EDITORS

NAAMSA is a pre-eminent industry representative that actively and responsibly represents, promote, advance and protect the interests of local manufacturers and assemblers of passenger, light and heavy commercial vehicles as well as major importers and distributors of new vehicles in South Africa. We represent 41 companies;

Our vision is to the most credible and respected thought leader and partner of a globally competitive and transformed automotive industry that actively contribute to the sustainable development of South Africa;

Enquiries: Michael M. MABASA, Chief Executive Officer, mike@naamsa.co.za;

Contact Numbers: +27 12 807 0152 or +27 82 909 6621; and
More information can be found on www.naamsa.co.za.

APRIL NEW SALES Covid-19

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