New-vehicle sales in SA plummeted 29.1% to 380,449 units in 2020, from 536,612 sales in 2019, due to the crippling effects of the Covid-19 pandemic.
In a heavy blow to an industry that contributes 6.4% to GDP, it was a drop back to sales levels of two decades ago, said the National Association of Automobile Manufacturers of SA (Naamsa).
Much of the damage was done during the hard lockdown when vehicle factories and dealerships were shut from March 27 to May 13, but sales haven’t recovered to previous levels since the automotive market reopened.
Vehicle sales increased every month between July and November, showing signs of resurgent consumer demand. But despite a 3% interest rate cut during the year to a near 50-year low, monthly new-vehicle sales since dealers reopened have been below the previous year’s levels.
In December 2020, overall new-vehicle sales were 37,493 units, which was a 10.1% decline on the same month in 2019. It was a mixed result, however, with new cars declining 14.4% but light commercial vehicles increasing 3.2%. Sales of heavy commercial vehicles and buses remained weak in December, declining year on year by 15.6%.
SA entered a recession before the outbreak of Covid-19, said Naamsa, which meant middle-class disposable income was already under pressure before the national lockdown.
“The vehicle rental industry, which is a major seasonal contributor to the new-vehicle market, also effectively remained dormant due to the lockdown restrictions on business travel and tourism for most of the year,” said Naamsa chair Mikel Mabasa.
The passenger car and light commercial vehicle markets continue to be characterised by a buying-down trend with many buyers moving to pre-owned vehicles. The premium-car segment had continued to experience significant pressure in 2020.
While vehicle exports in December smashed numbers achieved a year earlier, it was too little to rescue a miserable 2020 for the industry.
Local motor companies exported 18,479 cars and commercial vehicles in December — 36% higher than the 13,560 achieved in December 2019. But after nine months of Covid-induced collapse in consumer demand around the world, aggregate exports for 2020 as a whole fell well short of a year earlier — a 29.8% drop from 387,092 to 271,819.
Assuming Covid-19 doesn’t cause further harsh lockdowns, the general view is that markets will begin to recover in 2021 — though they may take two years to reach pre-pandemic levels.
Vehicle exports in 2020 declined to 271,819 vehicles — a 29.8% drop from the 387,092 vehicles exported in 2019.
Naamsa said tough months still lay ahead, but predicted an improvement of about 15% in domestic new-vehicle sales and a 20% improvement in vehicle exports for 2021.
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