2021 saw solid new car market growth

GIVEN the disaster of a year that 2020 was, it certainly wasn’t hard for the South African new vehicle market to improve on the previous year’s numbers. Those figures, released by Naamsa on Monday, are fairly encouraging.

A total of 464 122 new vehicles were sold in Mzansi last year, which represents a 22.1% increase over 2020. However, it could take at least another year for the market to reach pre-pandemic levels, given that vehicle sales declined by 29.2% versus the previous year. Historically speaking, SA car sales are still relatively low given that the market was averaging around 600000 units a year 10 years ago (572249 in 2011 and 630619 in 2012).

Last year’s market growth came in spite of numerous challenges experienced throughout the year, including global supply chain disruptions that led to stock shortages, the civil unrest in July, persistent load shedding and a three-week strike in the engineering sector. Clearly the market wants to grow and is doing so in spite of all of these circumstances and one can only imagine how things would improve if the conditions were more ideal.

“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 country’s projected GDP growth rate of around 5% for 2021,” Naamsa said in response to last year’s sales figures. “It was a very satisfying performance by an industry that has had to deal with numerous challenges over the course of the year.”

Naamsa says it expects the new vehicle market to continue its recovery this year, albeit at a more moderate rate. It predicts an overall market growth of around 8%, given that a GDP growth rate of 1.8% is forecast for the country. This could theoretically bring local vehicle sales past the 500000 mark once again, if only just.

| IOL Motoring