Motoring News

18-year low for auto trade – but resurgence pending

JOHANNESBURG, South Africa – The burden of the flu pandemic, continued economic pressure, and the consequent low levels of business and consumer confidence took their toll on new-vehicle sales through January.

In fact 2020 was the auto industry’s worst performance in 18 years.

However, the pundits say, ”there is light amidst that gloom” because the market continued to show signs of a slow recovery and a better 2021. This was emphasised by the National Association of Automobile Manufacturers of SA (Naamsa) reporting that new-vehicle sales were 13.9% down on January 2020 at 34 784 units.


Lebogang Gaoaketse, marketing and communications boss at WesBank Vehicle and Asset Finance, told The Corner in a media release: ”January sales were in line with expectations if you consider South Africa started the sales year in a return to Level 3 lockdown.

”We expect new-car sales to remain under pressure through 2021 because of subdued demand from retail and corporate sectors and the government. However, the used-car market will remain buoyant as people try to reduce their vehicle-related expenses.”

”The performance of the new vehicle market in the last quarter and in January 2021 year remains reassuring considering that 2020 sales were 29.1% down on 2019.”


He added: “It is also interesting to contextualise the broader economic environment through the previous five years whose impact has been accelerated by the pandemic. The 2020 market was 38.4% lower than the 2015 volume of  more than 600 000 vehicles, indicating the pressure of the past five years of recession.

”Then consider that the purely organic fall-off in sales during 2016 was 11.4% lower than 2015 – almost half the decline in sales in 2020 due to the pandemic – and perhaps the motor industry is actually faring quite well considering the circumstances.”

READ MORE Naamsa features on Carman’s Corner

Car sales bore the brunt of the volume losses if compared to those of 2020, down 18% to 23 853 units. Not even light commercials could muster the growth shown towards the end of that year: LCV sales were 4.9% down to 9 301 units.

Gaoaketse believed signs of a reduction in Covid infections are promising but also that the uncertainties of the pandemic would continue to affect the new vehicle market and the South African motor industry.


He explained: “The new-car market has seen steady volumes in the entry level and cost-conscious segments at the expense of the premium end of the market. We see no economic evidence to suggest that this will change significantly this year.”

Interest rates were unchanged through January – at historic lows.

Gaoaketse again: “Interest rates should remain low for some time to stimulate growth but there will be little – even no – room for further cuts. This continues to provide a good opportunity for people considering a new vehicle.”

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