Total earnings from South African automotive exports reached R164.9-billion in 2017, comprising 13.9% of South Africa’s total export earnings. This number is down from the record R171.1-billion achieved in 2016, at 15.6% of total export earnings.
Total automotive revenue in the South African automotive business sphere amounted to more than R500-billion in 2017.
The 2018 Automotive Export Manual (AEM), released on Friday, also indicates that 2017 vehicle and component production – with the auto sector the largest manufacturing sector in the country – accounted for 30.1% of South Africa’s manufacturing output.
The broader automotive industry’s contribution to the gross domestic product was 6,9% (4.4% manufacturing and 2.5% retail), down from 7.4% in 2016.
The yearly export manual is compiled by National Association of Automobile Manufacturers of South Africa and Automotive Industry Export Council executive manager Dr Norman Lamprecht.
The 2018 AEM shows that the seven major light vehicle manufacturers invested a record R8.2-billion in 2017, with investment by automotive component manufacturers at R4-billion. In comparison, 2016 investment by the light vehicle manufacturers reached R6.4-billion, with component manufacturers’ investment at R2.6-billion.
Considering that vehicle and component manufacturing comprises nearly a third of the country’s manufacturing output, Lamprecht says it is clear the automotive industry “is and will remain essential to the growth and success of the South African economy”.
A total of 338 093 South African produced right- and left-hand drive vehicles, along with a diverse range of automotive components, were exported to 149 countries in 2017.
The UK, at 98 358 vehicles, remained South Africa’s top destination for vehicle exports, as was the case in 2016.
Catalytic converters remained the most popular component exported (at 37.2%, or R18.7-billion, of the R50.3-billion of components exported from South Africa in 2017) followed by engine parts (R3.7-billion), tyres (R2.5-billion) and engines (R2.4-billion).
The domestic automotive industry’s top export markets in value terms (vehicles and parts combined) were once again Germany, at R46.7-billion, followed by the US, at R18.8-billion.
Lamprecht says Africa remains a priority focus for the South African automotive industry, with automotive exports (vehicles and parts combined) to 40 countries on the continent amounting to R29.7-billion, or 18% of the country’s total automotive exports in 2017.
Namibia was South Africa’s biggest African export market in 2017, at R7.1-billion, followed by Botswana, at R4.7-billon.
The continent’s motorisation rate of 42 per 1 000 people, compared with the global average of 180 vehicles per 1 000 people, remains the lowest of any region in the world, signalling the significant potential for the continent’s automotive market to grow.
The economic downturn on the continent, fuelled by a steep decline in commodities, has seen new-vehicle sales in Africa drop from a peak of 1.72-million vehicles in 2014, to 1.2-million in 2017.
The value of vehicle imports into South Africa increased from R56.2-billion in 2016, to R59.8-billion in 2017, which aligns with a modest year-on-year increase of 1.9% in the domestic new-vehicle market last year, following three successive years of decline.
India, at 88 110 units, or 29.9% of total light vehicles imported, was the top country of origin, in volume terms, for passenger cars and light commercial vehicles imported into South Africa in 2017.
The majority of high-volume, entry-level vehicles available in South Africa are manufactured abroad, mainly in India.
Volkswagen’s Polo Vivo is the exception.
The value of vehicles imported from India in 2017 was, however, nearly half of those imported from Germany, which included a number of expensive premium brands.
The top countries from which South Africa imported vehicles and parts in 2017 were Germany (R69-billion) and Japan (R20-billion).
Lamprecht says South Africa has one of the most competitive trading environments in the world.
Consumers could choose from 53 passenger car brands and 3 236 model derivatives in 2017. In the light commercial vehicle segment there were 34 brands and 698 model derivatives available.
This means South African car buyers were afforded the widest choice-to-market-size ratio anywhere in the world.
Although South Africa manufactured 56.4% of Africa’s vehicle production in 2017, the industry remains relatively small in a global context.
With 2017 production at 601 178 units, South Africa was ranked 22nd in respect of global vehicle manufacturing, with a market share of 0.62%.
With regards to passenger car production, Morocco, at 341 802 units in 2017, for the first time surpassed South Africa’s passenger car production of 331 311 units.