August 2023 | BUSINESS FLEET AFRICA
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Automotive industry
outperforms expectations
While the South African economic outlook remains dismal,
evidence or resilience is amazingly being seen in the transport and related industries.
Production figures in the mining and manufacturing sectors for example have been
surprising despite heavy load-shedding during the first part of 2023, suggesting that
these industries are becoming progressively more resilient to the effects of load-shed-
ding, as companies reduce their energy dependence on an embattled Eskom. I think
we may have reached a turning point as companies, industry and private individuals
have realised that they need to be self-sustaining. These investments in personal
infrastructure will take the load off the badly maintained infrastructure and with many
having made those investments the effects of load shedding could start to have less of
an effect on the economy.
A consistent stream of new and updated models, particularly in significant high-vol-
ume segments, along with improved availability of popular models, are proving to be
crucial factors in sustaining the growth trajectory of new vehicle sales in South Africa.
New vehicle sales continue to increase
The total market reached 43 389 units in July, a 1,3% increase compared to July 2022.
Of these sales an estimated 7 879 units or 81,8% represented dealer sales, 14,1%
represented sales to the vehicle rental industry, 1,7% sales to government and 2,3% to
industry corporate fleets.
Local sales of new light commercial vehicles, bakkies and mini buses at 12 666 units
during July signified an increase of 32,6% compared to the same month last year. A
significant increase in heavy truck and bus segment of 31,6% is a good sign of local
business confidence.
Fortunately the South African Reserve Bank paused interest rate at 8.25% in July,
after ten consecutive rate hikes totalling 475 cumulative basis points of hikes since
November 2021.
Witnessing continued growth in the current challenging economic environment is
encouraging, given that vehicle buyers are facing affordability pressures, a depreci-
ating rand that drives prices higher, low business confidence and political instability.
Vehicle sales performance across all segments is a good overall barometer of the auto-
motive industry and bodes well for business continuity in the automotive aftermarket.
Private businesses to the rescue
While I think we are still some way from a turning point, it is good to see that business
and government have finally realised that the country has a problem and are putting
steps in place to prevent us from entering a full-scale recession.
Unfortunately as with the load shedding crisis, finding real solutions and assisting
government to turn things around has become the responsibility of private businesses.
A collaboration between government and business, saw 115 private company CEOs
sign a pledge in July 2023 to help government turn the tide on the well documented
challenges. The pledge aims to achieve sustainable development and inclusive
economic growth. Through the stewardship of Andrew Kirby, naamsa’s Immediate
Past President and Toyota’s President and CEO, the auto industry has pledged to
remain invested in supporting the country’s recovery efforts and to strengthen their
investment in future.
Reuben van Niekerk
Editor
Editorial
EDITORIAL
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