DAVID FURLONGER: The South African motor industry is ahead of the game

They say there’s always someone worse off than yourself, even if it’s sometimes hard to believe. For South Africa, that point is underlined by research from UK short-term insurer GoShorty, showing that the local motor industry has had one of the best recoveries from Covid in the world.

From 631,921 in pre-Covid 2019, South African new-vehicle production slumped to 446,216 in 2020. In 2021, this rose to 499,087. The 12% increase ranked South Africa equal seventh on the global list of recovery rates.

Top of the charts, according to GoShorty, was Argentina, with 69% growth, from 257,187 to 434,753. It was followed by Indonesia (63%), India (30%), Kazakhstan (24%), Morocco (23%), Thailand (18%), then South Africa and Brazil on 12%. Filling out the top 10 were Portugal (10%) and Austria (9%).

Naamsa, in its latest quarterly bulletin, expects South African production to grow further this year to 566,700, then 629,900 in 2023. Longer-term growth, of course, will depend on the industry’s ability to reduce its almost total reliance on petrol and diesel internal combustion engines (ICEs) and start making electric vehicles (EVs).

More than 60% of vehicles built in South Africa are exported, most to countries that will outlaw ICE technology from 2030. With many other countries, notably in Africa, likely to cling to ICE technology for the foreseeable future, South Africa will become a dual-technology industry, building both ICEs and EVs. The government has set itself a target date of February to outline its plans to incentivise the EV shift. Motor companies, palpably frustrated by the snail-like pace of policy, say they will publish their own proposals later this month, through Naamsa.

I enjoy motoring trivia so the GoShorty report makes interesting reading. We all know that China has the world’s biggest motor industry, producing 26.1-million vehicles in 2021. Second was the US, with 9.2-million, then Japan, with 7.8-million).

But who made the least? Ignoring countries that assemble vehicles from imported kits, Serbia boasted (?) the world’s smallest vehicle manufacturing industry in 2021, with 21,263 cars and trucks. Next was Egypt, with 23,754. It doesn’t intend to hold that place for long. The Cairo government has placed the motor industry firmly at the heart of its industrial growth strategy, and the country wants to play a central role in development of a pan-African motor industry.

You can understand why. In some countries, says the report, one in six manufacturing jobs are to be found in the motor industry.

While Argentina, South Africa and the other overachievers have enjoyed a good post-Covid recovery, many other countries can’t say the same. Worst hit in 2021, says GoShorty, was Slovenia, where vehicle production fell by 32% from 2020. It was followed by Canada (19%), Uzbekistan (15%), Germany (12%), Serbia (9%), Spain (8%) and the UK (6%). For some of these countries, the picture is no better in 2022.

Once again, contrast that with South Africa. Comparing the third quarter of 2022 with that of 2021, Naamsa reports that production of cars rose by 76%, light commercial vehicles 28%, medium commercials 13%, heavy trucks 22% and extra-heavies 14%. Some truck companies temporarily stretched production beyond installed capacity, to meet demand.