SA new vehicle sales still in the doldrums despite small improvement

South Africa’s new vehicle sales for May were just over two-thirds lower than a year earlier, as the nationwide lockdown continued to put a damper on economic activity. 

But the 68{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} slump was still an improvement on April, when sales plummeted by a record 98.4{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}. 

Sales of cars were banned under alert level 5 during April, but reauthorised under level 4 from May 13. 

According to new figures released by the National Automobile Association of South Africa, SA’s motor industry continues to face “unchartered conditions”.

Exports also fell for May, declining by 64.1{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} compared to the previous year. “The performance of vehicle exports over the course of 2020 remains linked to the duration of the Covid-19 pandemic and its impact on the global economy,” the association said on Monday in a statement. 

Vehicle manufacturers will be able to return to full production from Monday as the alert level falls from 4 to 3. And while Naamsa expects exports to gain momentum as production ramps up, overall export performance will still depend on how global vehicle demand recovers as countries start to exit their lockdowns. 

“The impact of Covid-19 on the new vehicle market and when the level of factory output will return to where it was before the lockdown will only become clearer once the entire motor industry becomes fully operational and prepares itself for the ‘new normal’,” the group said. 

SA’s automotive industry contributes roughly 6.4{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to GDP, accounting for an estimated 457 000 direct and indirect jobs.