Toyota CEO predicts new vehicle sales figures higher than 2019

New-vehicle sales will grow by at least 16.3% this year, lifting the market above pre-Covid levels and launching a period of sustained growth, Toyota SA CEO Andrew Kirby predicted on Thursday.

Kirby, almost the only forecaster to come close to 2021’s 22% improvement (he predicted 21%), said 2022 growth would be even higher if the motor industry could overcome supply constraints.

Speaking at Toyota’s annual industry briefing in Kyalami, he expected 2022 sales to reach 540,000 — up from 464,469 in 2021. That would take it beyond the 536,612 of 2019.

“I then expect to see continuous, steady growth until 2025,” he said.

Before Covid-19, the market had been in decline since peaking at 649,217 in 2013. Like 2021, Kirby is much more bullish than other analysts.

Mikel Mabasa, CEO of Naamsa, the Automotive Business Council, recently predicted 8% growth. Early this week, Alex Boavida, vice-chair of the National Automobile Dealers Association, gave a range of 10%-15%. On Thursday, Standard Bank automotive retail finance head Cyril Zhungu offered 8%-10%.

Kirby said his 16.3% was actually a conservative estimate. If the global motor industry could overcome a shortage of components, including semiconductor microchips, international shipping services could return to some level of normality, and the SA government could energise the economy, consumer demand could elevate sales well beyond his projected 540,000.

The microchip shortage forced global motor companies to cut production by more than 7-million vehicles in 2021, while lack of shipping cargo capacity delayed shipments of vehicles and components by up to seven weeks. In SA, as elsewhere, consumer demand continues to outstrip vehicle availability.

Boavida said: “A normalised stream of stock entering SA will help to bolster sales.”

Zhungu, who forecast a 2022 market of 500,000 vehicles, said market growth could be restrained by rising unemployment and consumer debt levels. Escalating credit costs — the result of two recent interest-rate increases — must also be factored in.

Kirby said above-inflation price rises could also affect demand — though he said Toyota would try to absorb many of the additional costs. The weak rand was increasing import bills for vehicles and components, steel prices had risen by over 20% in the 2021, and shipping container rates had risen up to 400%. He predicted that SA new-vehicle prices would rise 3%-5% in coming weeks, followed by further increases later in the year.

Kirby said the SA motor industry urgently needed the new-vehicle market to grow. The Covid-19-induced market collapse after March  2020 had undermined the government’s SA automotive masterplan, which was intended to at least double the size of the industry by 2035. Industry and the government recognised it would need a further “five to 10 years” to meet those goals, Kirby said. The hiatus had also delayed efforts to encourage local manufacture of electric vehicles (EV).

The department of trade, industry & competition had planned to publish an EV white paper at the end of 2021, outlining plans to incentivise local EV sales and manufacture. Kirby said publication was now not expected until mid-2022 at the earliest, so planners could revisit previous assumptions and find a policy that was practical and affordable.