Despite adverse economic disruptions and recovery efforts from severe flooding in KwaZulu-Natal in the second quarter of the year, new-vehicle sales increased by 16.9% year-on-year and 17.6% quarter-on-quarter in the third quarter, reports the National Association of Automobile Manufacturers of South Africa (Naamsa).

During the third quarter, aggregate domestic vehicle production increased by 49.2% year-on-year, with the third quarter of 2021 having experienced a negative impact on vehicle production as a result of adverse economic disruptions, a cyberattack on Transnet’s operations resulting in a force majeure being declared as well as Covid-19 Alert Level 4 lockdown restrictions in the country at the time.

However, third-quarter vehicle exports increased by 92.2% year-on-year.

Naamsa CEO Mikel Mabasa says that, during the quarter under review, consumer inflation had reached a 13-year high, increasing to 7.8% along with the sixth consecutive increase in interest rates since November 2021.

“September was also by far the worst month of the year in terms of the cumulative amount of loadshedding. The higher stages of loadshedding seem to have an amplified negative impact on production and the South African economy as a whole,” he adds.

Mabasa also notes that the recovery in business and leisure travel was providing some support to the new-vehicle market to counter the growing pressures on household incomes.

In the third quarter, local vehicle manufacturers made 80 667 passenger cars – an increase of 76.4% year-on-year; while light commercial vehicles experienced 28.2% growth to 60 341 units.

Medium commercial vehicles experienced 12.8% growth with 2 386 vehicles being made in the third quarter, while 1 653 heavy commercial vehicles were 21.8% up year-on-year.

Extra heavy commercial vehicle production in South Africa was 14.1% up with 4 294 vehicles being made in the third quarter; while 213 busses made locally represented a 8.7% increase year-on-year.

Sales of so-called “new energy” vehicles by 13 industry brands increased by 29.1% quarter-over-quarter, from 738 units in the second quarter to 953 units in the third quarter.

Third-quarter industry employment increased by 690 jobs to reach 34 300 positions at the end of September.

Naamsa also reports that average local automotive industry capacity use levels during the third quarter increased overall in line with the recovery in vehicle production following the impact of the KwaZulu-Natal flooding disaster during the second quarter.

Aggregate capital expenditure by the major vehicle manufacturers in 2021 recorded its second-highest level on record at R8.8-billion

The Naamsa in-house CEOs confidence index points to 55.5% of South African automotive CEOs being confident that domestic new-vehicle sales will increase in the next six months, while 33.3% expect such sales to remain the same and 11.1% expect sales to decline over the next six months.

Vehicle export sales are also expected to increase, with 66.7% of local automotive CEOs voicing their confidence in such a move; while 33.3% expect exports to remain the same. Importing of new vehicles is expected to increase by 66.7% of CEOs.

As for South African production levels, 77.8% of local automotive CEOs believe performance will increase, while 22.2% think it will remain at the same level.

Local vehicle manufacturing-related employment is expected to increase by 22.2% of automotive CEOs, while 66.7% think it will stay at the same level and 11.1% expect such levels to decline over the next six months.

In terms of general new-vehicle business conditions in South Africa, 33.3% of automotive CEOs expect such levels to increase, while 44.5% think these conditions will remain the same and 22.2% expect such conditions to decline.