On a year-to-date basis, vehicle exports moved into positive territory for the first time this year and were 2.9 percent ahead of the corresponding period in 2021, the National Association of Automobile Manufacturers of South Africa (Naamsa) said yesterday.
However, it warned further interest rate increases were expected in South Africa for the balance of the year that would impact consumer and business sentiment negatively, as well as the new vehicle market.
This after the SA Reserve Bank (Sarb) increased interest rates by 75 basis points in July, the biggest hike since September, 2002 and the fifth increase since November, 2021 to combat rampant inflation.
Vehicle sales numbers for exports at 31 242 units reflected a 1 177.7 hike in July from the prior corresponding period.
But it flagged that while further new locally manufactured model introductions were expected to boost vehicle exports for the balance of the year, global economic growth prospects had been revised downwards.
A key driver in this decline was the much weaker growth prospects for Europe, which was the South African automotive industry’s largest export region.
Looking at the new vehicle market’s performance for July, Naamsa said it was in line with the June, 2022 performance but distorted when compared to the corresponding month in 2021.
“The economic disruptions caused by unrest in KwaZulu-Natal and certain areas across Gauteng, the cyberattack on Transnet operations, which led to a force majeure, which in turn impacted negatively on vehicle export and import operations, as well as the adjusted Alert Level 4 lockdown restrictions. These restrictions lasted for more than five weeks, severely curtailing the automotive industry’s performance at the time,” Naamsa said.
Thus aggregate domestic new vehicle sales in July, at 43 593 units reflected an increase of 30.9 percent. Overall, out of the total reported industry sales of 43 593 vehicles, 83.6 percent represented dealer sales, an estimated 10.4 percent was sales to the vehicle rental industry, 5 percent to industry corporate fleets, and 1 percent sales to the government.
The new passenger car market at 31 455 units had registered an increase of 50.2 percent in July, with the car rental industry supporting the new passenger car market during the month and accounting for 13.2 percent of the sales.
But domestic sales of new light commercial vehicles, bakkies and minibuses at 9 547 units recorded a 6.9 percent decline in July.
Sales for medium and heavy truck segments of the industry reflected a positive performance during the month and at 790 units and 1 801 units, respectively, showed an increase of 33 percent in the case of medium commercial vehicles. In the case of heavy trucks and buses, there was an increase of 18.3 percent.
Naamsa said although the new vehicle market’s performance for the year-to-date was still 13.9 percent ahead compared to the corresponding period in 2021, the Absa Purchasing Managers’ Index (PMI index-tracking) expected business conditions in six months’ time to dip to 49.4 in July, 2022.
This was the first time since the second quarter of 2020 during the strictest phase of South Africa’s Covid-19 lockdown restrictions that respondents expected conditions to worsen going forward.
Meanwhile, the Port Elizabeth Car Terminal said yesterday it had broken its own record by handling 24 142 fully built units in July, the highest ever in the history of the terminal and 93 percent above the planned monthly budget.
“While the terminal was in the middle of a capacity creation project that was unlocking its ability to handle more volumes, the rise in trans-shipment volumes had been the greatest contributor. The volumes were attributed to car manufacturers Suzuki, TATA, Caterpillar and Volkswagen,” it said in a statement yesterday.
It also said the operational team had averaged 200 units an hour against a target of 180 units per hour, a key performance indicator that they exceeded by 11 percent. The capacity creation project currently in progress at the terminal would see an additional 3 000 parking bays created at the end of September, bringing the overall terminal capacity to 8 000.