The Automotive Business Council has once again reaffirmed its position that as an export-oriented industry, the South African automotive sector welcomed the New Energy Vehicle [NEV] Green Paper, as a precursor to a White Paper, in establishing a clear policy foundation that will enable the country to coordinate a long-term strategy that will position South Africa at the forefront of advanced vehicle and vehicle component consumption and manufacturing and increase our competitiveness in the global race to transition from the internal combustion engine era into electro-mobility solutions and technologies. “We welcome the release of the Auto Green Paper on NEVs as a consultative and a discussion document. naamsa is currently consulting extensively with all its members and with all our strategic partners and we should be ready to provide the Minister of Trade, Industry and Competition with our initial thoughts to the draft Green Paper by the closing date this Friday, June 04, 2021”, said Mikel MABASA, naamsa CEO.
Changing gears and reflecting on the new vehicle sales statistics for the month of May 2021, naamsa said that although strict level 4 lockdown measures were in place in May 2020, the Automotive Business Council successfully engaged with Government at the time to accommodate the sector to ease back into production and retail sales during the month under level 4 instead of levels 3 and 2, respectively. It should be noted that the month-on-month comparisons will remain distorted for the time being in view of the hard lockdown restrictions in place during the second quarter of 2020.
In the event, aggregate domestic sales in May 2021, at 38,337 units, reflected an increase of 25,463 units, or 197,8%, from the 12,874 vehicles sold in May 2020. Export sales also recorded a gain of 23,425 units, or 196,8%, to 35,326 units in May 2021 compared to the 11,901 vehicles exported in May 2020.
Overall, out of the total reported industry sales of 38,337 vehicles, an estimated 33,642 units, or 87,8%, represented dealer sales, an estimated 8,2% represented sales to the vehicle rental industry, 2,0% to industry corporate fleets 2,0%, and sales to Government. The May 2021 new passenger car market at 24,122 units had registered an increase of 15,156 cars, or a gain of 169,0%, compared to the 8 966 new cars sold in May 2020.
The car rental industry accounted for 11,4% of car sales in May 2021.
Domestic sales of new light commercial vehicles, bakkies and mini-buses at 11,930 units during May 2021 had recorded an increase of 8,859 units, or a gain of 288,5%, from the 3,071 light commercial vehicles sold during May 2020. Sales for medium and heavy truck segments of the industry also reflected a positive performance and at 559 units and 1,726 units, respectively, showed an increase of 256 units, or 84,5% in the case of medium commercial vehicles, and, in the case of heavy trucks and buses an increase of 1,192 vehicles, or a gain of 223,2%, compared to the corresponding month last year.
The May 2021 exports sales number at 35,326 units reflected an increase of 23,425 vehicles, or 196,8%, compared to the 11,901 vehicles exported in May 2020. For the first five months of 2021 vehicle exports were now 67,2% above the corresponding period last year.
Following the temporary shutdown of the domestic automotive industry in April 2020 under level 5 of the country’s lockdown restrictions, vehicle production and retail sales only started to ease back into operation in May 2020 under level 4 and the month-on-month comparison therefore remains distorted. However, the new vehicle market is in gradual recovery mode in line with the anticipated growth rate in excess of 3% projected for 2021 for the domestic economy and for the year to date aggregate new vehicle sales were now 44,9% above the same period last year.
The naamsa CEOs Confidence Index, an in-house leading business confidence indicator of current and future developments in the domestic automotive industry, reflects the general agreement by the naamsa CEOs that business conditions for the automotive industry over the next six months will continue to improve. They are mainly positive of a robust recovery in the domestic as well as the global new vehicle markets over the next six months, as the domestic and international markets rebound from the low base of 2020. However, structural constraints in the economy, coupled to the growing debt of the country and the ongoing electricity capacity limitations would continue to curb a potential quick recovery to pre-COVID-19 levels.
Vehicle exports continued their upward momentum during the month in line with the rebound in the global economy and subsequent higher demand for vehicles in international markets. Since most OEMs have grown their volumes substantially and produce a very high proportion of vehicles for the export market, vehicle exports remain key to the viability of the domestic automotive industry.