Dr Norman Lamprecht
South African vehicle manufacturers in April joined the negotiations around the formation of an African Tripartite free trade area (TFTA).
The local industry was pursuing duty-free access for new vehicles made in South Africa to the markets included in the TFTA, said National Association of Automobile Manufacturers of South Africa (Naamsa) executive manager Dr Norman Lamprecht.
Speaking in Pretoria at the launch of the Automotive Export Manual 2017, he said vehicle exports from South Africa were previously excluded from the negotiations around duty-free imports into TFTA markets.
The TFTA includes the Southern African Development Community, the East African Community and the Common Market for Eastern and Southern Africa.
The TFTA agreement was signed in 2015, with the intent to finalise it in 2016. While the basic framework is in place, negotiations on the agreement remain a work in process.
Lamprecht said 1.3-million new vehicles were sold in Africa last year, with South Africa the biggest market, at 547 406 units.
This meant there remained an annual market of around 750 000 new vehicles that South Africa could potentially access.
South Africa’s current market share of new-vehicle sales in the rest of Africa was between 3% and 4%, noted Lamprecht, with the appetite for the biggest share of the market filled from outside Africa.
“South Africa exported 21 000 new vehicles to rest of Africa last year.
“It makes sense for South African vehicle manufacturers to pursue the African new-vehicle market. We are part of this continent and the market is right on our doorstep.
“For South African-based vehicle manufacturers to attain higher production volumes, exports to regional markets should be an attractive proposition.”
New-vehicle exports from South Africa to the rest of Africa have fallen quite dramatically in recent years.
Export sales of new vehicles declined from 78 787 units in 2013 to 61 839 units in 2014, 42 234 units in 2015 and 21 564 units in 2016.
The decline has been spurred on by “a combination of factors, including ad hoc duty increases (Nigeria and Zimbabwe), regulatory restrictions (Algeria) and continued weak economic conditions in most African countries.
“When the economic climate improves, South Africa would be well positioned to benefit from duty-free market access into more African regions,” said Lamprecht.