April’s devastating KwaZulu-Natal floods may have put a dent in new-vehicle sales but the impact could have been much worse, Naamsa CEO Mikel Mabasa said on Tuesday.
Figures released by Naamsa show that 37,107 new cars and commercial vehicles were sold in SA last month. That was almost 30% down on March’s 50,465 — the best sales month since October 2019. Some backtracking was inevitable, given April’s plethora of public holidays and long weekends.
But also to blame were the floods, which brought chaos to Durban harbour, the motor industry’s main import-export hub, and forced Toyota SA, the local market leader, to temporarily suspend vehicle production at its nearby vehicle assembly plant.
Compared to March, Toyota domestic sales fell from 15,008 to 8,952 (still a substantial market lead) and exports from 6,837 to 3,629. The good news was that April’s industrywide sales were 4.3% better than the 35,591 of April 2021. That was barely one-quarter the rate of January-March year-on-year growth (16.5%), but Mabasa said the market remained “in positive territory” and “continued its road to [post-Covid] recovery”.
Mark Dommisse, chair of the National Automobile Dealers Association, said sales were achieved “against all odds”. He said: “The SA motor industry continues to astound not only commentators on the outside but also those people working on the inside, with its ability to overcome setbacks and disruptions”.
Car sales improved 12.9% in April from a year earlier, from 22,729 to 25,653.
Car-rental companies accounted for 12.5% of that, reflecting their growing confidence in tourism and business travel prospects now that Covid restrictions are lifted. Sales of light commercial vehicles, mainly bakkies and minibuses, fell sharply in April, along with medium and extra-heavy trucks. After four months of 2022, aggregate sales of new vehicles totalled 173,299 — 14.9% more than the 151,022 at the same stage last year.
The effect of the floods is not over yet. Durban harbour is still sorting itself out and some rail repairs are yet to be completed, so lingering stock shortages are likely. These must be added to pre-existing supply-chain challenges.
Mabasa said: “In addition to the renewed impact of Covid, in particular in China, the global shortages of semiconductors and the repercussions of ... Russia’s invasion of the Ukraine, the added shock of the flooding disaster to domestic business conditions will be felt for some time to come.
“The domestic automotive industry is expected to continue a stop-start recovery in 2022 in view of prevailing supply-chain disruptions, insufficient stocks and escalating energy and transportation cost increases.”
New-vehicle exports will also be affected though these were relatively buoyant in April. They increased 16% from April 2021, from 26,540 to 30,788. For the year to date, they sit at 119,151 — 2.7% ahead of the 116.014 at the end of April 2021.
With the Russia-Ukraine conflict adding to fears of a slowdown in global growth in 2022, Mabasa said the SA motor industry was “highly vulnerable to changes in demand in export markets”.
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