Motor industry grinds to a halt
No car production or new-car launches as coronovirus lockdown takes hold
As the country grinds to a near-halt due to the coronavirus lockdown from March 27 to April 16 announced by president Cyril Ramaphosa, SA’s car and truck manufacturing plants will be shutting down for the compulsory 21-day period.
It follows the closure of several car factories around the world in response to the Covid-19 pandemic. Almost every major carmaker has closed production plants in order to slow down the spread of the virus and due to drastically reduced demand around the world.
It is too soon to put a value on the lost revenues it will cause the local automotive industry, which contributes 6.9% to the country’s GDP and is directly and indirectly responsible for about 457,000 jobs.
The export of vehicle and automotive components reached a record amount of R178.8bn in 2018, equating to 14.8% of SA’s total exports. Aggregate capital expenditure by the major vehicle manufacturers in 2019 recorded its second highest level on record at R7.27bn.
"The Covid-19 coronavirus is cutting a swathe through the economic and social fabric of the world and bringing incalculable human cost. Indeed, it is presenting an economic crisis few expected to see again in their lifetimes after the 2007/8 global financial crisis,” says Calum MacRae, Automotive Analyst at GlobalData, a data and analytics company.
"Once again, the automotive sector, as one of the most powerful economic multipliers, is at the forefront of the economic crisis. Hardly an hour has gone by in the past few days without an announcement by an automaker that it was stopping production.”
The Retail Motor Industry Organisation (RMI) has appealed Business Unity South Africa (Busa) to convince government to declare tyre-, parts- and accessory retailers, as well as repair- and maintenance servicing outlets for motor vehicles and motorcycles, “essential services” and not to limit their functioning as part of business closures within SA.
Jakkie Olivier, CEO of the RMI, says the services provided by the auto aftermarket sector need to be viewed as essential services to support other critical services sectors necessary to limit the spread of Covid-19 including emergency vehicles, law enforcement, fire prevention services and delivery vehicles.
The lockdown has caused the postponement of several local new-car launches that were to take place in the coming weeks, among them the Toyota Corolla Sedan, Renault RS Trophy and BMW 2 Series Gran Coupe.
Even before the official lockdown was announced, the pandemic caused the cancellation or postponement of several motorsport events.
These include the cancellation of the South Coast Bike Fest in Port Edward from April 25 to 27. The remaining three Bike Fest SA events currently remain on schedule, namely Clarens from July 24-26, Ballito from September 4-6, and Lanbebaan from October 23-25. Please visit www.bikefestsa.co.za for the latest updates.
The Simola Hillclimb due to have taken place in Knysna from May 7-10 has been postponed to later in the year, at a time when this becomes “sensible, safe and possible” according to the organisers. The Knysna Motor Show scheduled for May 3 has been cancelled. Organiser Peter Pretorius of the Garden Route Motor Club says that the show will not be rescheduled to a later date in the year.