• The National Association of Automobile Manufacturers of South Africa (Naamsa) has reacted to President Cyril Ramaphosa's economic recovery plan.
• Naamsa says the country loses close to R4-billion per year due to illegal grey imports.
• Naamsa says it has commissioned a study aimed at finding ways to stimulate new vehicle sales.
The National Association of Automobile Manufacturers of South Africa (Naamsa) notes the country's Economic Reconstruction and Recovery Plan delivered by President Ramaphosa on Thursday, 15th October 2020.
Effect of Covid-19 on the local economy
The Economic recovery plan was presented at the back of escalating fiscal and social crisis, which had been looming over time with the economy having had two quarters of recession pre-Covid-19 and further exaggerated by the impact of Covid-19 concomitated lockdowns.
The Covid-19 quarter saw the economy go into a 51% GDP contraction in the second quarter 2020 and saw the unemployment rate descended to 42% with 2.2-million people having lost their jobs according to data from StatsSA.
The infrastructure development plan should also focus on cost and efficiency in transport and ports systems for the export-oriented industries, the organisation says.
Cost and efficiency improvements in logistics costs would enhance the automotive industry's international competitiveness and is also one of the key pillars under the industry SA Automotive Masterplan 2021-2035 of which the objectives include to produce 1.4-million vehicles per annum by 2035, doubling of manufacturing employing and transformation of the industry value chain.
As the automotive industry, Naamsa is particularly concerned about the impact of grey imports where approximately 300 000 of the 12.7-million vehicles on South Africa's roads are illegally operated, which could potentially result in the fiscus losing around R3.8-billion per annum in tax collection.
The body says new vehicle sales are linked to the strength of the economy and the year to date new vehicle sales, contracted by 33.4% or 132 878 units compared to the corresponding period last year owing to Covid-19 market contraction.
As part of Covid-19 mitigation strategies Naamsa says it has commissioned a study aimed at exploring ways to stimulate new vehicle demand in the country.