The South African new-vehicle sales market will shrink by 4% in 2020, says Toyota South Africa Motors (TSAM) president and CEO Andrew Kirby.
He says Toyota expects the passenger car market to decline by 4%, to 339 900 units, with the light commercial vehicle market (LCV) to drop by 2%, to 150 585 units.
The bad news for fleet operators is that Kirby expects the medium commercial vehicle market to drop by 10%, to 7 880 units, with the heavy commercial vehicle market to lose a whopping 14% in volume, to reach 16 635 units in 2020.
Kirby says 2020 will see a “significant softening” in the market, with the first nine months to be particularly tough.
He adds that 2019 failed to deliver the change the South African economy and business leaders had “wished and hoped” for, which means the 2020 market will, most likely, continue the steady decline evident since 2013.
Rand Merchant Bank chief economist Ettienne le Roux says that while South African consumers will, most likely, see more interest rate cuts this year, consumer spend is likely to remain limited.
Reasons for this include a fresh emigration wave that is diminishing the pool of funds available to buy goods; the large number of people currently being retrenched, with this number set to rise; as well as the likelihood of rising electricity prices, further emptying consumers’ pockets.
The taxes paid on income and wealth are are also at a record high in South Africa.
Le Roux expects the South Africa’s economy to grow 0.6% this year, compared with last year’s 0.3%.
Kirby notes that TSAM sold 130 072 vehicles in South Africa in 2019, down from the 133 603 units sold in 2018. The company still, however, managed to celebrate its fortieth year of leadership in the domestic market, with a 24.2% share of the market.
This means that almost one in every four vehicles sold in South Africa is a Toyota.
The local arm of the Japanese car maker achieved its highest LCV market share to date, at 40.9%, thanks largely to the enduring popularity of the Hilux bakkie.
Overall, the company achieved 24.2% market share in 2020.
Toyota has 264 dealers countrywide.