Africa|Aggregate|Automotive|Business|Energy|Export|Manufacturing|rail|Road|supply-chain|Technology|transport|Equipment|Manufacturing |Operations
Africa|Aggregate|Automotive|Business|Energy|Export|Manufacturing|rail|Road|supply-chain|Technology|transport|Equipment|Manufacturing |Operations
africa|aggregate|automotive|business|energy|export|manufacturing|rail|road|supply chain|technology|transport|equipment|manufacturing-industry-term|operations

Naamsa calls for timely NEV policy on back of 100% increase in Q2 sales

Ford Ranger at Silverton plant

Photo by Creamer Media's Marleny Arnoldi

15th August 2023

By: Marleny Arnoldi

Deputy Editor Online


Font size: - +

Naamsa | The Automotive Business Council reports that new-vehicle sales increased by 8.6% year-on-year in the second quarter of the year, while new energy vehicle (NEV) sales grew by 100.7% year-on-year.

The industry, however, sold 8.1% fewer new vehicles quarter-on-quarter, which likely reflects the strain on consumers’ budgets following a further interest rate increase and ongoing affordability considerations.

The strong performance of the new-vehicle market during the second quarter of this year, compared with the same quarter of last year, reflects the lower base effect owing to the impact of the severe flooding in KwaZulu-Natal on vehicle production and supply chain disruptions at the time, the entity states.

The passenger car segment, in particular, remained under pressure in view of higher interest rates and inflationary pressures, while the improved performance in the heavy commercial vehicle segments is mirroring the increasing reliance on road transport owing to ongoing structural rail network challenges.

Positively, NEV sales by 18 industry brands grew from 738 units sold in the second quarter of last year to 1 481 units sold in the second quarter of this year.

Following a significant year-on-year increase of 421% from 896 units in 2021 to 4 674 units in 2022, comprising 0.88% of total new-vehicle sales, NEV sales for the first half of this year increased by a further 47.1% to 3 146 units, compared with the 2 139 units sold in the first half of 2022.

Battery electric vehicle sales in the first half of this year, at 502 units, were already at the level of the 502 units sold for the full 2022.

Naamsa says a timely NEV policy framework to support investment decisions for NEV manufacturing and to safeguard export volumes into the European market, is imperative for the domestic automotive industry’s inevitable transition to NEVs.

Moreover, the industry body reports that the second quarter saw the automotive industry gaining 105 jobs, with aggregate industry employment having increased from 33 392 at the end of March to 33 497 at the end of June.

The average monthly vehicle manufacturing industry employment number for 2022 was 33 321, compared with 30 697 in 2021.

Naamsa says there was a recovery in vehicle production to pre-pandemic levels in 2022, with various new generation models launched by manufacturers.

The industry body elaborates that average industry capacity utilisation continues to recover to pre-pandemic production levels, but the ongoing global semi-conductor shortage, as well as loadshedding in South Africa, have impacted on the operations of original-equipment manufacturers differently.

These two factors typically increase costs in the domestic supply chain, while raw materials remain subject to exchange rate movements and the global price index.

The global semi-conductor shortage resulted in about 4.2-million fewer vehicles produced in 2022, following a loss of about seven-million units globally in 2021.

Although global vehicle production increased by 6% to 85-million vehicles in 2022, up from the 80.2-million units produced in 2021, it was still 7.7% below the pre-pandemic level of 92.1-million vehicles produced in 2019.

South African vehicle production increased by 11.4% to 555 889 units in 2022, compared with the 499 087 units produced in 2021, which exceeded the global vehicle production growth figure of 6%.

The South African market still leads in the continent’s vehicle production, accounting for 54.4% of Africa’s total vehicle production, followed by Morocco, which accounts for 45.5% of the total. 

Aggregate capital expenditure (capex) by major light vehicle manufacturers in 2022 amounted to R7.1-billion, mostly owing to new-generation model investments, compared with the R8.8-billion spent in 2021.

Naamsa adds that much of the capex invested by the industry is linked to the Automotive Production Development Programme that South Africa has in place to promote higher levels of production and the development of new models.

Further, vehicle exports remain key for the domestic producers to generate economies of scale and to achieve improved international competitiveness.

Vehicle exports increased by 13.8% year-on-year in the second quarter to 88 025 units.

Almost 67% of domestic light vehicle production was exported in 2022, with Europe remaining the dominant market for these exports.

The future of South Africa’s vehicle exports to Europe is uncertain, however, owing to increasingly strict emission regulations.

Naamsa, therefore, urges government and manufacturers to align domestic vehicle production and policy with the overall technology shift of the global value chains in which the manufacturers operate, to safeguard the country’s future vehicle exports.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online




We are dedicated to business excellence and innovation.

SBS Tanks
SBS Tanks

SBS® Tanks is a leading provider of innovative water security solutions with offices in Southern Africa, East and West Africa, the USA and an...


Latest Multimedia

sponsored by

Magazine round up | 19 April 2024
Magazine round up | 19 April 2024
19th April 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.127 0.188s - 173pq - 2rq
Subscribe Now