Johannesburg – Despite the many industrial headwinds currently hampering the industry, South Africa’s new vehicle market is expected to grow by more than 15% in 2022, Toyota South Africa Motors (TSAM) President and CEO Andrew Kirby said on Thursday.
Kirby was speaking at the company’s annual State of the Motor Industry event held at Kyalami Raceway. He predicted that total industry sales would amount to 540 000 units, effectively bringing the industry back to pre-pandemic levels, given that 536 612 vehicles were sold in 2019. However, it must be borne in mind that 2019 was not a particularly good year for the industry, with South Africa’s annual sales having gradually declined to that level from 649 216 units in 2013.
“The extrapolation (540 000 units) is based on a variety of socio-economic factors that do not bode well for the local motor industry, including the rising interest rate cycle, the strain taken by the agricultural sector due to heavy rainfall, the muted tourism recovery as well as possible market instability owing to ANC leadership elections and NBF wage negotiations,” Kirby said.
However, the CEO said his prediction was “constrained” and that the market could grow by an even bigger margin if the current issues in the automotive supply chain were to be resolved. This includes current shipping challenges as well as the ongoing semiconductor chip shortage, which many analysts believe will improve later in 2022.
The National Automobile Dealers’ Association was less bullish but still somewhat optimistic, with its prediction of a 10% to 15% overall market growth for 2022.
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“We expect sales to be back to pre-pandemic numbers in 2022. Last year proved to be a much better year than expected when compared to 2020,” said NADA Vice-Chairperson Alex Boavida. “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.”
These predictions come off the back of surprisingly strong January 2022 sales figures, with the market having grown by 19.5% versus the same month last year. The full year of 2021 saw industry sales grow by around 22%.
“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,” Boavida added “The global shortage of semiconductors, 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.
“This strong performance in times of adversity underlines the resilience and determination to succeed that exists in the local motor industry,” Boavida concluded.