Reflecting on the new vehicle sales statistics for the month of September 2020 naamsa confirmed that aggregate domestic sales at 37 403 units continued to improve in line with lower lockdown levels over recent months but still reflected a decline of 11 737 units, or 23,9% from the 49 140 vehicles sold in September last year. Export sales at 28 704 units also registered a fall of 7 566 units or a decline of 20,9% compared to the 36 270 vehicles exported in September 2019.
The easing of lockdown restrictions to level 1 during the month contributed to the uptick in business activity and new vehicle demand and drove the further improvement in business conditions in the South African manufacturing sector. However, business conditions remain far from normal and the new vehicle market is expected to remain under pressure in the current economic scenario.
For the year to date the new vehicle market has now contracted by 33,4% or 132 878 units compared to the corresponding period last year. An important avenue for government to support this key coronavirus-hit sector of the economy is to reduce taxes on new vehicle purchases to stimulate new vehicle sales. Combined with record low interest rates and low inflation, the automotive industry and the economy in general could hugely benefit should the tax burden on vehicles be reduced during this time.
naamsa is also deeply concerned about the impact of grey imports in South Africa as approximately 300,000 of the 12.7m cars on our roads are illegally imported vehicles. The number of grey imports is growing at 30,000 vehicles per annum. Without doubt, grey imports displaces new car sales. Based on the suite of taxes applicable to new car sales locally, naamsa estimate that this is costing the fiscus R3,8bn per annum.
Vehicle export numbers continue to recover to some extent as the automotive industry’s major export destinations are starting to ease their lockdown restrictions. Going forward, South African vehicle exporters will be required to consider various scenarios for the world economy and global trade patterns in the short to medium term.
Download the full NAAMSA media release below as well as the September 2020 Industry New Vehicle Sales.