Ford sold the most cars in April, although these were transactions that started in March. File picture: Ford via Quickpic.
Ford sold the most cars in April, although these were transactions that started in March. File picture: Ford via Quickpic.

Record low South African car sales reflect lockdown pain

By Prinesha Naidoo Time of article published May 5, 2020

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Johannesburg - South African new car sales plunged to a record low in April, showing some of the first measurable signs of the economic impact of the nationwide lockdown to curb the spread of the coronavirus.

Domestic vehicle sales dropped by 98.4% from a year earlier to 574 units, the National Association of Automobile Manufacturers of South Africa said in an emailed statement on Monday. That compares with average monthly trade of more than 41 000 units over the last 20 years.

South African car exports fell by 97.3% to 901 units, Naamsa said. 

South Africa implemented one of the most severe lockdowns in the world from March 27, allowing most people to only go out to buy food, seek medical care and collect welfare grants. For five weeks, only essential goods were allowed to be sold and that meant car dealerships had to close their doors and could only start trading again from May 1, subject to specific directions.

The Naamsa data show only 105 passenger cars were sold in April, a drop of 99.6%. Some of those may, however, be transactions that started in March and were only completed and recorded last month. The data forms part of the Reserve Bank’s leading indicator, which gives a sense of the future state of the economy.

Ford sold the most vehicles domestically in April, with 304 sales, while Toyota followed with 93 units and MAN with 62.

A true disaster

While the drop in sales was to be expected because dealerships were closed, “it is a disaster,” said Mike Schussler, chief economist at “Consumer spending in South Africa at the moment will be a disaster. I suspect we’re going to get very big-double digit annualized declines in the gross domestic product numbers on the back of very, very weak consumption expenditure.”

Consumer spending makes up about 60% of GDP. The economy contracted on an annualised basis in the last two quarters of 2019 and was stuck in its longest downward cycle since World War II even before the impact of Covid-19. That was due to Eskom's load shedding and poor business and consumer confidence. National Treasury estimates show GDP could contract by as much as 16.1% this year, depending on how long it takes to contain the virus and for the economy to recover.

The motor industry is the largest component of South Africa's manufacturing sector and employs more than 100 000 skilled workers. 


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