THE new vehicle market is expected to continue its gradual recovery during 2022, albeit at a slower pace than in 2021 and a year-on-year improvement of around 8 percent in aggregate new vehicle sales volumes is projected, Naamsa, the Automotive Business Council said yesterday.
Factoring an anticipated 15 percent improvement in vehicle exports, industry vehicle production of about 17 percent was projected for 2022 – the automotive industry is South Africa’s largest manufacturing sector.
Vehicle sales rebounded strongly year-on-year by 22.1 percent to 464 122 units in 2021. This followed the massive 29.2 percent slide in vehicle sales to 380 206 units during 2020, due to the impact of the Covid-19 pandemic.
“It was a very satisfying performance by an industry that has had to deal with numerous challenges over the year, ranging from global supply chain disruptions, insufficient model availability, persistent load shedding, escalating logistics cost, as well as several domestic shocks,” Naamsa said.
“Domestic economic disruptions caused by the civil unrest, the cyberattack on Transnet operations, the 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 rate increase in three years did not deter sales too much. The industry has remained resilient, Naamsa said.
Renewed activity in the vehicle rental industry supported passenger car sales in the second half of the year, as the economy started to open to overseas visitors.
The buying down trend in the new passenger car sales continued, 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 their performance mirrored the improved macroeconomic climate in the country.
Many Covid-19 disruptive elements were expected to remain in play in 2022, and prevailing conditions would continue to be hampered by rising costs and supply chain disruptions, such as the global semiconductor shortages impacting on the availability of certain models.
Load shedding would remain an area of “great concern”. Furthermore, rising interest rates and fuel prices were expected to impact vehicle affordability.
While the new vehicle market had seen substantial growth since the initial shock, it has not been sufficient to return to pre-Covid-19 levels in 2021, Naamsa said.
BUSINESS REPORT ONLINE