Europe's second wave threatens SA auto industry

The pace of recovery of South Africa's new vehicle sales has been slow, with figures still well below 2019 levels.
The pace of recovery of South Africa's new vehicle sales has been slow, with figures still well below 2019 levels.
  • 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. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.14
(+0.01)
ZAR/GBP
20.38
(+0.09)
ZAR/EUR
18.41
(-0.00)
ZAR/AUD
11.26
(+0.19)
ZAR/JPY
0.15
(+0.08)
Gold
1839.37
(-0.03)
Silver
24.02
(-0.04)
Platinum
1039.00
(+1.65)
Brent Crude
48.78
(+0.95)
Palladium
2338.99
(+1.59)
All Share
58947.48
(+1.14)
Top 40
54171.85
(+1.29)
Financial 15
11399.33
(+0.82)
Industrial 25
79681.43
(+0.78)
Resource 10
56621.26
(+2.07)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 373 votes
No, I did not.
52% - 918 votes
My landlord refused
28% - 490 votes
Vote