Global automotive company Isuzu Motors South Africa – a subsidiary of Isuzu Motors Limited – expects domestic vehicle sales to decline by around 30% this year, compared with those of 2019.
“Our D-MAX sales have performed better than expected, with our market share tracking at 16.6% in October to date. During August, we had the best Isuzu D-MAX August sales month in 14 years,” says Isuzu Motors South Africa CEO and MD Billy Tom.
In terms of trucks, the company’s share of the medium and heavy commercial market (excluding vans and buses) is tracking at 12.6% a year to date. Isuzu has led in this segment of the market for over seven years in a row and it plans to retain this position for 2020, he says.
Despite the impact of Covid-19 on other African markets, Isuzu has delivered a good sales performance in these markets, with an increase of 4% during the first ten months of this year, compared with the same period last year. In October, Isuzu sold the most D-MAX bakkies in the Zimbabwe market since the start of the year, accounting for about 20% share of the market.
Tom notes that Isuzu has also maintained its number one position in Kenya, to which it exports semi-knocked down bakkies.
“Isuzu is optimally positioned in Africa, as a result of its manufacturing facility in Kenya and its role in a joint venture manufacturing operation in Egypt, as well as its strong base in South Africa.
“Couple this with an expansive network of 112 dealers across Africa and it is clear that we have the right structure to grow in Africa. The only area where we need to establish a stronger presence is in West Africa, and we are working on a plan to address this,” he tells Engineering News.
The most recent example of a significant market downturn was during the 2008/09 global financial crisis, during which the market declined owing to a global downturn.
Currently, however, the global economy has been halted and is being subjected to ongoing changes and interruptions, depending on the various Covid-19 containment measures, Tom says.
“This is a very different situation, which means that, in the short to medium term, we should expect that vehicle exports will remain under significant pressure and that market recovery plans will remain unpredictable.”
Similarly, domestic vehicle sales will continue to be under immense pressure for the foreseeable future, with the economy expected to contract by up to 8% by the end of this year. Considering the current local and global economic environments, 2021 is likely going to be a challenging year for vehicle sales, adds Tom.
Meanwhile, South Africa currently lags behind the rest of the developed world in the global drive to reduce carbon emissions and adopt more environment-friendly vehicle options.
Key issues impeding the adoption of electric vehicles locally include the lack of charging infrastructure, as well as the limited range and premium selling price of these vehicles, he says.
Therefore, to develop a local supplier industry that supports electric component manufacturing, the demand for electric vehicles would need to achieve significant sales volumes which would make this a viable option.
“Ultimately, to enable this, government will first need to provide incentives to offset the duty penalties of completely built-up vehicles to help create demand.”
Further, towards the end of last year, Isuzu Motors Japan committed R1.2-billion to investment in the next-generation bakkie programme in South Africa.
Despite the complexities which Covid-19 has caused, project teams from Japan, Thailand and South Africa have continued to work full steam ahead on this project, with a priority focus on engineering the vehicle to meet the requirements of the company’s customers in the Africa markets and also in terms of increasing localisation opportunities.
“Covid-19, as expected, has disrupted the operations of most businesses globally, including that of Isuzu’s global supply chain. To this end, we are working closely with our local and international suppliers to ensure that the appropriate mitigation plans are in place to support the updated timeline for our next-generation D-MAX programme,” Tom highlights.
The strength of the Isuzu brand came to the fore with the Isuzu D-MAX winning the online 2020 Zimbabwean Car of the Year Award, he concludes.