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There are very few sectors of the South African economy that won’t suffer in the wake of the coronavirus pandemic.
According to Nedbank’s latest report, around 1,6 million jobs will be lost this year, and Dondo Mogajane, the National Treasury’s director-general, says that the country’s unemployment rate could reach between 30% and 40%.
It’s easy to pinpoint industries like restaurants and travel as those which will be most affected, but the same is also true for anybody selling new cars in South Africa.
The latest stats on new vehicle sales, released by the National Association of Automobile Manufacturers of South Africa (Naamsa), shows that sales dropped by an incredible 98% during April, when compared to the same time last year.
April 2019 saw 36 787 vehicles sold, and this year that number plummeted to 574. Here’s Fin24:
Most (318) of the vehicles sold in April were light commercial vehicles, and the rest were passenger cars. Industry wide, the volume of sales is down 32.1% for the year to date…
Naamsa previously reported that new vehicle sales for March, totalling 33 545, declined nearly 30%, year-on-year. At the time, the association attributed the decline to challenging economic conditions in SA as well as developments related to Covid-19.
Michael Mabasa, Naamsa CEO, did say the huge drop was to be expected, as many outlets couldn’t sell during the month of April, and exports were also not allowed.
Still, that statistic is going to have a knock-on effect for an industry already heading into unchartered territory:
The automotive industry contributes 6.9% to GDP – 4.4% of is this attributed to manufacturing and 2.5% is attributed to retail. The industry accounts for 30.1% of the country’s manufacturing output and vehicle components are exported to 155 international markets, according to Naamsa. The manufacturing side of the industry employs more than 110 000 people and the sector as a whole supports 457 000 jobs, both directly and indirectly.
The industry’s significant 6.9% contribution to GDP means that many jobs are potentially impacted, across manufacturing and retail, as is foreign currency revenue from exports…
In a commentary on the latest vehicle sales statistics, Nedbank said that the outlook for new vehicle sales for the rest of the year had been “dimmed” by the effects of the Covid-19 pandemic.
There’s “dimmed”, and then there’s a drop of more than 98%.
You have to be sitting rather pretty to fork out for a new car under the current circumstances.
[source:fin24]
