VEHICLE sales rebounded by 148.6 percent during the second quarter over the Covid-19-affected same quarter in 2021, but the 2.9 percent decline compared with the first quarter of this year signalled a slowdown in the recovery.
The weaker performance in new passenger cars and bakkies during the second quarter 2021, compared with the previous quarter 2021 when the economy grew by an annualised 4.6 percent, signalled ongoing fragile consumer confidence.
These were some of the findings of the National Association of Automobile Manufacturers of SA (Naamsa) quarterly survey that was released yesterday, which otherwise revealed an industry in recovery mode, in spite of supply disruptions.
Vehicle exports continued an upward momentum in the second quarter and for the first half of 2021 were 66 percent above the corresponding 2020 first half, but were still 0.9 percent below the corresponding quarter in 2019.
Second quarter industry employment reflected an increase of 390 jobs to 30 315 positions at end-June 2021.
Industry capacity utilisation levels continued to gradually improve, reflecting the better local and international market conditions.
Local second quarter vehicle production, supported by robust global demand as well as a strong rebound in the domestic new vehicle market, reflected a massive increase of 173 percent compared to the severely affected
Covid-19 corresponding quarter in 2020. Motor manufacturers, meanwhile, spent their highest annual level ever in capital expenditure last year, at R9.2 billion.
Before the Covid-19 pandemic, various vehicle manufacturers operated on a three-shift basis as well as multishifts in selected areas such as machining, press shops, paint shop operations and body shops.
During the second quarter, two manufacturers operated on a combined single, double, and three-shift basis, two manufacturers operated on a combined single- and double-shift basis, one on a double-shift basis and two manufacturers on a single-shift basis. The availability and supply of imported components continued to be affected by Covid-19 related disruptions such as vessel and container shortages, resulting in increased ocean freight rates during the quarter.
The global shortage of semiconductors, impacting on supply chains, was also an ongoing concern. Some manufacturers reported local steel shortages associated with price increases.
The continued high levels in capital expenditure were due to investment projects by manufacturers in terms of the Automotive Production Development Programme, which are normally spread over multiple years and linked to higher levels of production for export markets.
The vast majority of the Naamsa chief executives are extremely positive that the automotive industry's key performance indicators, namely new vehicle sales, vehicle exports, vehicle imports and vehicle production as well
as the general automotive business conditions will continue to improve over the next six months.
The domestic economy is reflecting a robust recovery from the Covid19 affected 7 percent decline in 2020 while the global economy is also on the rebound.
The domestic automotive industry, however, is still in recovery mode and aiming to recoup some of the 2020 losses in sales and exports volumes.
The cautious views expressed on the employment, investment and capacity utilisation performance indicators are indicative of the anticipated protracted return to pre-Covid-19 levels.
The vast majority of the chief executives polled in the survey were “extremely positive” that new vehicle sales, vehicle exports, vehicle imports and vehicle production as well as the general automotive business conditions would continue to improve over the next six months.
The industry, however, is still in recovery mode. It is aiming to recoup some of the 2020 losses in sales and exports volumes, and cautious views expressed on the employment, investment and capacity utilisation performance indicators were indicative of an anticipated protracted return to pre-Covid-19 levels.
BUSINESS REPORT