A total of 464,122 new vehicles were sold in Mzansi last year, an increase of 22.1% in 2020. That’s not saying much though, considering the market took such a dip in the first year of the pandemic. It’s expected it will take at least another year to normalise.
Last year's market growth came despite numerous challenges throughout the year, including global supply chain disruptions leading to stock-outs, civil unrest in July, continued disruptions in the freight industry and a three-week strike in the engineering sector. However, the market continued to grow despite these challenges, and hopefully this uptrend will continue once things get back to ‘normal’.
New vehicle sales reflect SA’s overall economic performance
There is a strong correlation between national new vehicle sales and the overall performance of the economy. The performance of the new vehicle market has been aligned with the country's expected GDP growth rate of around 5% by 2021, noted Naamsa (the National Association of Automobile Manufacturers of South Africa).
Naamsa expects the new car market to continue its recovery this year, albeit at a more moderate pace. The industry association forecasts an overall market growth of around 8%, given that a GDP growth rate of 1.8% is projected for the country. In theory, this could push local vehicle sales back past the 500,000 mark, if only just a little.
The performance of vehicle exports remains dependent on the performance and direction of global markets. In 2022, vehicle exports of the domestic auto industry are expected to benefit from favourable overseas conditions, as well as the introduction of several new models by major vehicle exporters.
Looking ahead to 2022
Load-shedding will remain a great concern in 2022, limiting the ability of the economy to reach full capacity.
Furthermore, the realities of rising interest rates and fuel prices are expected to affect vehicle affordability as family budgets remain under pressure. Given the expected annual improvement in vehicle exports of around 15%, an improvement in industrial vehicle production of around 17% is projected by 2022.
Looking to buy a new car?
During 2021 there was a shift from new to used car purchases, with over 1.5 million used car registrations. This has pushed up the price of used cars. It’s bad news if you’re looking to buy a car and good news if you want to sell – your car is probably worth a lot more now than it was a year ago.
Whether you want to buy or sell a new car, MotorHappy is here to help. Visit our online marketplace to list your car or browse the hundreds of cars available for sale.
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