The National Automobile Dealers’ Association (NADA) expects sales growth of between 10% and 15% in the South African new-vehicle market this year. 

The estimate is based on buoyant sales in the first month of the year, together with positive trends seen last year.

The projection is, however, dependent on stock supply normalising swiftly.

“We expect sales to be back to pre-pandemic numbers in 2022,” says NADA vice-chairperson Alex Boavida.

“Last year proved to be a much better year than expected, with 22% growth thanks to local sales of 86 7673 more units than in 2020. 

“We were, however, still not back to the market levels of 2019, and lagged by 14%, or 72 490 units, compared to results from two years ago.”

NADA says that the average growth of 16% across all vehicle categories in 2021 was heartening, with extra-heavy commercials the best performer with sales up 24%. 

Passenger car sales followed closely with sales up 23% (57 177 more units sold). 

“These were positive results in a year with a great deal of turmoil including the ongoing Covid-19 pandemic, civil riots and social unrest, as well as interest rate and fuel price hikes,” notes Boavida.

“The global shortage of semi-conductors, or microchips as they are better known, and other automotive components, has also impacted new-vehicle production for the past two years, but a normalised stream of stock entering South Africa will help to bolster sales numbers in 2022.”

The upward movement in interest rates and fuel prices will affect passenger car sales more than the sale of commercial vehicles, adds Boavida.

“The increase in interest rate is predicted to be as much as 1.5% in 2022, which is significant in a country where consumers have more debt exposure than in previous years and hikes put added strain on consumers’ disposable income.”

Government’s undertaking to improve the ease of doing business in South Africa will go a long way towards reducing the overhead compliance costs of motor retailers, which in turn, will translate into savings to the consumer in the long term, she notes.

“NADA eagerly awaits government’s engagement on this undertaking.”

Electric Vehicles
“One trend that we envisage growing apace in 2022 is the increased introduction of electric vehicles into the South African market,” says Boavida.

“We see more manufacturers launching several electric models in South Africa this year, putting additional focus and emphasis on this sales channel.  

“We see intensified consumer education on the benefits of these vehicles, as well as an increase in the emphasis on technology, such as applications specifically developed for customers.”