In its latest quarterly report, the National Association of Automobile Manufacturers of South Africa (Naamsa) says it expects South African new-vehicle sales to reach 558 000 units this year, inching up from last year’s 557 701 units.
At this point in time, the association expects only a marginal improvement in sales in 2019, at 572 500 units.
The local truck market should reach 27 000 units in 2018, up from 2017’s 26 293 units. The 2019 market should add 500 units to the tally, to reach 27 500 units.
Naamsa anticipates new-vehicle exports from South Africa to reach 340 050 units in 2018, which is a slight improvement on last year’s 338 093 units.
Next year should see a jump to 384 150 units.
Naamsa expects domestic new-vehicle production to reach 604 050 units this year, also a slight increase on last year’s 601 178 units. The association forecasts an improvement to 657 650 units in 2019.
Naamsa notes that the timid 2018 numbers were driven by an economic performance “well below expectations” in the first half of the year, followed by a continued subdued economic environment into the third quarter.
“The domestic vehicle market is likely to stabilise in coming months, but any recovery will be modest,” notes the association in its report.
“Current conditions of subdued vehicle price inflation should support aggregate sales. Overall growth, however, will be affected by pressure on disposable income due to higher taxes and increases in the price of fuel.
“Unsurprisingly, current market conditions are characterised by a buying-down trend in favour of entry-level vehicles, as well as small special utility vehicles and crossovers.
“The premium segment continues to experience significant pressure.”
Naamsa believes government’s recent investment summit should serve as a platform to re-establish trust between itself and the private sector, restoring credibility in South Africa as a business-friendly market economy and generating a quantum increase in investment.
“These investments, together with appropriate supporting policies, should translate into higher economic growth over the medium term. This would benefit new-vehicle sales.”
Naamsa notes that the momentum of export sales has increased over the past few months and, taking into account relatively strong order books reported by most vehicle exporters, exports should reflect “strong upward momentum” in 2019.