The South African automotive industry consists of a wide range of companies and organisations involved in the design, development, manufacturing, marketing, importation, exportation and selling of motor vehicles. It is one of the country’s largest economic sectors by revenue as it contributes 4,3% to the country’s GDP [2,4% manufacturing and 1,9% retail]. The industry accounts for 17,3% of the country’s manufacturing output. We are the country’s 5th largest exporting sector out of all 104 sectors and accounts 18,1% of total exports.
The South African new vehicle market reflected a robust recovery in 2021 increasing by 22,2% to 464,493 units compared to the severely COVID-19 affected 380,206 units in 2020. A close correlation exists between domestic new vehicle sales and the overall performance of the economy, and the new vehicle market’s performance was aligned with the strong recovery in the country’s GDP growth rate of around 5% for 2021.
Vehicle exports increased by 26,733 units to 298,020 units in 2021, from the 271,287 vehicles exported in 2020, while the export value increased by R17,1 billion from the R121,2 billion recorded in 2020 to R138,3 billion in 2021. Automotive component exports reflected an increase of R14,7 billion to a record R69,2 billion in 2021, from the R54,5 billion in 2020, boosted by record catalytic converter exports of R34,9 billion. Automotive exports comprised a substantial 12,5% of total South African exports in 2021. The automotive industry’s export destinations increased to 152 countries in 2021 from the 147 destinations in 2020, with the export value doubling from 2020 to 2021 in the case of 32 of these countries.
AUTOMOTIVE INDUSTRY GP CONTRIBUTION
Source: naamsa, 2022
The Original Equipment Manufacturers building cars and bakkies, together with their suppliers and dealers, generate significant revenue for the SA economy and employs more than 110,000 people across its various tiers of activity [from component manufacturing to vehicle assembly]. Combined with the industry’s strong multiplier effect, the auto industry is responsible for more than half a million jobs across the SA economy’s formal sector.
Automotive manufacturing depends on thousands of companies supplying parts, components, and materials, as well as a vast retail and vehicle maintenance network of dealers. No other industry in South Africa has such an expansive reach across the country, delivering economic benefits and creating jobs in so many different sectors. With its linkages throughout the economy, the country’s automotive industry is a turbo-charged engine for the manufacture and export of vehicles and automotive components to world markets. In South Africa, the automotive industry continues to reflect the power of combining good industrial policy and foreign investment and is not only the backbone of the industrialisation drive in South Africa but is also key to ensuring greater economic growth.
Globally the COVID-19 global pandemic continued to hinder personal mobility needs while supply chain disruptions slowed down the post-COVID-19 global recovery of the global new vehicle market in 2021. Furthermore, vehicle imports will remain subject to stock availability in view of the ongoing global semi-conductor shortage expected to continue well into 2022 and at this point in time is projected to increase in line with the increase in the domestic new vehicle market. The South African automotive industry displayed its renowned resilience to adapt well to several serious challenges faced in 2021 as all the industry’s key performance indicators for 2021 reflected very positive outcomes compared to the COVID-19 affected 2020 performance record. The 2021 automotive performance indicators were recorded as follows: Total production increased by 11,8% recorded at 499,087 units; total exports increased by 9,9% recorded at 298,020 units; total vehicle sales increased by 22,2% recorded at 464,493 units, and total imports increased by 22,2% recorded at 262,281 units.
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