South Africa’s automotive industry sold 623 914 new vehicles in 2012, which is a 9.2% improvement on the 571 415 new cars, bakkies, trucks and buses sold in 2011, reports the National Association of Automobile Manufacturers of South Africa (Naamsa).

Including sales of 7 794 units not reported officially by Chinese importer Great Wall Motors, total South African new-vehicle sales reached around 631 700 vehicles in 2012.

This number signals the third year of consecutive growth for the local industry, following record sales of 714 315 vehicles in 2006, and a subsequent three-year market decline to 2009.

The 2012 passenger car market was up 11.3% on 2011 numbers, at 439 997 units. Light commercial vehicles grew at a more subdued rate, at 4.6%, to reach 156 170 units. The truck market also did not reflect the same enthusiasm seen in the car market, with medium commercial vehicles up 6% to 9 816 units, and heavy trucks, extra-heavy trucks and buses up 2.8% to 17 931 units.

Toyota was South Africa’s best-selling vehicle brand in 2012 for the thirty-third year running. Toyota’s final 2012 sales tally was 121 276 vehicles, up from 109 413 units in 2011.

Naamsa says initial number crunching indicates that the motor industry’s new- vehicle-related sales turnover grew by 11% in 2012 to reach roughly R182-billion.

Industry new-vehicle export sales added a further estimated R52-billion to industry revenue.

Naamsa says the local automotive industry exported 277 844 new vehicles in 2012, a 3.5% increase over 2011, recording the second-highest export figure on record.

“Higher exports into African markets, China and Australia – particularly light commercials – more than offset lower new-car exports into Europe,” notes Naamsa.

Exports are expected to expand significantly in 2013 to reach 361 300 units, an improvement of around 30%.

Based on an assumption that the South African economy will grow by around 3% in 2013, Naamsa projects a 7.3% increase in new- vehicle sales for the year.

“Prospects for the industry for 2013 at this stage remain positive. However, volume growth is expected to be more subdued than the annual growth in total sales recorded over the past three years, namely 24.7% year-on-year in 2010, 16.1% in 2011 and 9.2% in 2012.”

Growth is expected to be supported by historic low interest rates, improved vehicle affordability, new high-technology-model introductions, easier access for consumers to vehicle finance and continued strong replacement demand following record industry sales in 2006, notes Naamsa.

However, the association also warns that new-vehicle demand may be derailed by rising inflation and the associated risk of upward pressure on interest rates towards the end of the year. Vehicle manufacturers and importers are also under pressure from the weaker rand, which means the relatively modest vehicle price increases over the past three years may not be sustainable.

South Africa’s economic performance is also closely linked to that of Europe, the US and Asia, with the global economy still affected by financial difficulties in the euro zone.

Another worrying factor is the automotive industry wage negotiations set to start during the second quarter of 2013. Naamsa says these discussions will “hopefully result” in a new multiyear wage agreement without any disruption at production sites.

Factoring in domestic and export sales, the local production of vehicles in South Africa is expected to rise from around 550 000 vehicles in 2012 to about 650 000 units in 2013 – a healthy increase of about 18%.

Standard Bank vehicle and asset finance head Sydney Soundy says sales of diesel- and hybrid petrol-engine vehicles grew faster than petrol-engine sales in 2012.

He says there is an overall trend towards more fuel- efficient vehicles on the back of rising fuel costs. He notes that the inland petrol price has risen by 39.98% and the inland diesel price by 45.27% from January 2011 to December 2012. He says the impact of Gauteng tolling will also add to rising transportation costs.

Soundy says a shift towards affordable vehicles is also evident, based on 2012 sales volumes in different price categories.

Standard Bank projects growth in new- vehicle sales of 6% for 2013.
This is based on, among other factors, consensus among economists that South Africa’s economic growth will be muted at around 3.1%, and that there will be no significant improvement, if any, on personal disposable income levels.

he domestic new-vehicle sales baseline set in 2012 surpassed the 600 000 figures last seen between 2005 and 2007.