(4 minutes read)
· New vehicle sales in South Africa declined by a whopping
98.2% in April, during a nationwide lockdown on account of Covid-19
· The automotive industry contributes 6.9% to GDP – 4.4% of
this is attributed to manufacturing and 2.5% is attributed to
declining retail sales
New vehicle sales in South Africa declined by a whopping 98.2% in
April, during a nationwide lockdown on account of Covid-19.
According to the National Association of Automobile Manufacturers of
South Africa (NAAMSA), 574 vehicles were only sold in April. Of these:
105 passenger cars and 318 light commercial vehicles. Across
industry, the volume of sales is down 32.1% for the year to date.
As against this, total sales in March was 33 545. New vehicle sales
for March declined nearly 30%, year-on-year. The decline was mostly
due to dithering economic conditions, which was compounded by
Covid-19. Naamsa’s members include auto-manufacturers, such as Toyota,
Isuzu, Volkswagen, BMW, Ford, Nissan and Mercedes-Benz.
The automotive industry contributes 6.9% to GDP – 4.4% of this is
attributed to manufacturing and 2.5% is attributed to declining retail
sales. The industry accounts for 30.1% of the country’s manufacturing
output and vehicle components are exported to 155 international
markets. The manufacturing side of the industry employs more than 110
000 people and the sector as a whole supports 457 000 jobs, both
directly and indirectly.
The industry’s significant 6.9% contribution to GDP means that many
jobs are potentially impacted, across manufacturing and retail, as is
foreign currency revenue from exports. Earlier, Absa reported that
business activity in the manufacturing sector crashed to an all-time
low in April as manufacturing output came to a standstill due to the
lockdown. Production was zero during the lockdown in many units.
Overall, the Purchasing Manager’s Index declined only moderately from
48.1 to 46.1. In April only the manufacture of essential goods was
allowed, due to the lockdown.
South African economists maintain that the fall in actual
manufacturing production was sharper than that reported during the
2008/09 global financial crisis. The ongoing nationwide lockdown has
sent many of the manufacturing operations; but predicted that South
Africa’s retail sector is showing a better recovery trajectory than
markets like China where shoppers continue to stay away from shopping
malls.
