CAPE TOWN - The car rental industry bought only 8 vehicles in August, or 0.04 percent of new vehicle sales, compared with 18 percent in August 2019, due to the massive blow to the tourism industry of the Covid-19 pandemic.
National Automobile Association of Automobile Manufacturers of South Africa figures released yesterday also showed a 53.1 percent year-on-year decline in export volumes in August, compared with a decline of 29.6 percent in July, as export volumes have also lost momentum.
Vehicle exports have been crucial in keeping South Africa’s auto industry operating at full capacity.
Recovery in the auto industry was likely to take some time, said Absa economist Peter Worthington in a note. NAAMSA recently predicted that total car output would shrink by 31 percent this year.
Domestic vehicle sales contracted by 26.3 percent year on year to year units in August, compared to a fall of 29.6 percent in July, an outcome that was slightly better than Worthington’s forecasts.
Passenger vehicle sales contracted by 32.8 percent year-on-year in August, only slightly better than the 35.9 percent decline in July.
Domestic sales of new light commercial vehicles, bakkies and mini-buses at 11 336 units in August declined by 2 719 units, or a fall of 19.4 percent from the 14 055 light commercial vehicles sold during the corresponding month last year.
Sales for medium and heavy truck segments of the industry reflected an uptick and at 799 units and 1 835 units, respectively, a gain of 7.7 percent in the case of medium commercial vehicles, and, in the case of heavy trucks and buses a gain of 9 percent compared to the corresponding month last year.
New vehicle demand improved slightly compared to the performance of the previous two months as South Africa’s lockdown restrictions eased further to Level 2 in August 2020. However, activity in the new vehicle market was expected to remain low for the remainder of the year due to the uncertainties relating to the pandemic and as consumers and businesses continue to adapt to short-term budget pressures.
Furthermore, the addition of further rolling blackouts pointed to an already hard-hit economy with no expectations for a quick recovery any time soon, Naamsa said.
On exports, Naamsa said the domestic automotive industry’s major export destinations were starting to ease their lockdown restrictions with many actively stimulating their new vehicle markets with financial government incentives.
BUSINESS REPORT