africa|motors|supply chain

Toyota SA predicts 7.8% increase in new-vehicle market in 2023

17th February 2023

By: Irma Venter

Creamer Media Senior Deputy Editor


Font size: - +

Toyota South Africa Motors (TSAM) predicts that this year’s domestic new-vehicle market will grow by 7.8%, to 570000 units, up from 528 963 units last year.

TSAM president and CEO Andrew Kirby says this positive number will be driven by the “pure, natural demand” retained from last year, rather than the country’s inherent growth prospects.

Current predictions show that South Africa’s economy is likely to grow by about 1% in 2023, which would normally point to a flat new-vehicle market.

“The big unknown for this year is the impact of loadshedding,” says Kirby. “The impact is vast, and it is affecting a lot of businesses, large and small . . . with a number of people losing their jobs, businesses and livelihoods. So, it is challenging bringing that into the forecast.”

Kirby explains that the natural demand for new vehicles in South Africa is forecast to reach between 580 000 and 600 000 units for last year, with constraints in supply ensuring that the eventual tally falls well short of that number.

However, TSAM believes that the natural demand remains at that number this year, but with new-vehicle supply set to improve.

“We cannot fulfill the pure demand in South Africa this year as an industry, but we think some improvement in supply will enable us to move to a 570 000-unit market,” says Kirby.

He adds that significant constraints will remain within the supply chain and semiconductor market in 2023.

Premium Market Starts Recovering
South Africa’s premium market staged a long-awaited recovery in 2022, even though the final numbers were nowhere near previous levels, says Kirby.

He says the premium market has witnessed a “significant downward trend” in the last five years – “in fact 35% in the last five years, which is quite dramatic”.

TSAM’s portfolio includes the Lexus premium brand.

One of the reasons for the recent decline is that mainstream carmakers have been rolling out higher specification levels in their vehicles, causing a “grain overlap between volume players and the premium segment”, says Kirby.

“But it is good so see some recovery in the premium segment in 2022.”

According to TSAM’s numbers, the premium market moved to 35 077 units in 2022, up from 31 239 units in 2021.

The forecast is for the recovery process to continue, with new premium car sales to reach 39 300 units in 2023.

In 2018, the market totalled 53 650 units.

“This segment has been really hard hit by the semiconductor shortage,” says Kirby.

“From a Lexus point of view, our supply was only 50% of what we ordered [in 2022]. And I know our competitors were in a similar situation.”

Small-Car Market Booming
While South Africa’s premium market has faced serious challenges over the last five years, the budget car market has been booming as consumers are buying smaller and cheaper vehicles in the face of increasingly tough economic conditions.

It is TSAM’s strategy to grow its market share in this segment from the current 17% to 25% by 2025, says sales and marketing senior VP Leon Theron.

“We have ambitious plans for small cars.”

As part of this onslaught, Toyota will launch the Vitz small car in the second quarter of the year, with this vehicle set to replace the Agya.

Other newcomers include the new Urban Cruiser, also set to make its debut in the second quarter, with the Crown hybrid to also grace showroom floors in 2023.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor



SMS group
SMS group

At SMS group, we have made it our mission to create a carbon-neutral and sustainable metals industry.

Actom image

Your one-stop global energy-solution partner


Latest Multimedia

sponsored by

Magazine image
Magazine round up | 12 July 2024
12th July 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:2.495 2.561s - 171pq - 2rq
Subscribe Now