- A second wave of Covid-19 infections in Europe could threaten the recovery of SA's vehicles exports.
- Views on conditions for the automotive industry over the next six months largely remain pessimistic.
- The recovery in new vehicle sales has been slow, with sales levels still below 2019 levels.
A second wave of Covid-19 infections in Europe could threaten the recovery of South Africa's automotive industry, particularly vehicle exports.
The National Association of Automobile Manufacturers of South Africa (Naamsa) on Monday released data on new vehicle sales for October. The industry contributes 6.4% to GDP and accounts for 27.6% of the country's manufacturing output.
New passenger car sales declined 25.4% compared to new cars sold in October last year.
Export sales declined, by 18.9% or over 7 700 fewer exports than October 2019. For the year to date, there has been a 35.3% decline in exports or about 119 000 fewer vehicles.
While activity in the new vehicle market has been improving from prior months this year, sales are still slow and have not yet recovered fully. "We are not out of the woods yet. While vehicle exports are making a steady comeback, we remain cautiously anxious about the reports of a Covid-19 second wave across Europe which could further depress our overall outlook for the balance of this year," said Mike Mabasa, Naamsa CEO.
Industry players are also pessimistic about business conditions over the next six months, Naamsa highlighted.
The recovery of vehicle exports will depend on improvements in the economic climate of SA's main trading partners, the association said.
"A second wave of Covid-19 infections in Europe, accounting for three out of every four vehicle exports at present, poses significant downside risks on the pace of recovery in domestic vehicle exports over the short to medium term."
In the past week several European countries such as Germany, France, Greece and Austria renewed lockdowns, as did the UK.