Total automotive revenue in the South African automotive business sphere amounted to more than R500 billion in 2017.
South Africa’s automotive industry achieved total export sales of vehicles and components worth R164.9 billion last year, which represented almost 14 per cent of the total South African exports according to newspaper reports.
This enabled the domestic automotive industry to register its third consecutive annual trade surplus at R10.3 billion despite a 3.6 per cent decline in the total export value from R171.1 billion in 2016.
Norman Lamprecht, the executive manager of the National Association of Automobile Manufacturers of South Africa (Naamsa) and Automotive Industry Export Council, said recently the timing of new model launches towards the end of last year also impacted on vehicle exports, which declined by three per cent to 338 093 units last year from the record 344 821 units exported in 2016.
But Lamprecht, who was speaking at the launch of the 2018 Automotive Export Manual that he produces, said this figure still comprised the third highest export level on record.
Morocco last year produced 345 000 passenger cars compared to the 331 000 produced in South Africa to overtake the domestic industry and become the largest producer of passenger vehicles on the African continent for the first time.
But Lamprecht did not believe Morocco posed a threat to South Africa’s automotive industry because it was about 16km from Europe and focused on that market rather than sub-Saharan Africa.
Lamprecht said the South African automotive industry continued to strengthen its global export footprint. The number of export destinations with export values in excess of R1 million declined to 149 last year from 154 in 2016, but 22 countries recorded export values in excess of R1 billion and 68 countries in excess of R100 million.
Germany at R46.7 billion followed by the US at R18.8 billion were the industry’s top export markets for South Africa. He said Africa remained a priority focus for the South African automotive industry and highlighted the enormous potential for growing vehicle demand in Africa.
Automotive exports to 40 African countries amounted to R29.7 billion or 18 per cent of the country’s total automotive exports of R164.9 billion last year. But Lamprecht said the motorisation rate at 42 per 1 000 persons, compared to the global average of 180 vehicles per 1 000 persons, remained the lowest in the world.
“Considering a population of more than 1.2 billion and a burgeoning middle class, there is enormous potential for growing vehicle demand on the continent.”
“We exported 22 000 vehicles to Africa last year. Five years ago we sold 80 000 vehicles, but we no longer have any exports to two major African countries since the doubling of import duties in Nigeria and import regulations in Algeria.”
“But 22 000 vehicles out of one million vehicles sold in Africa is two per cent. If we can increase that to 10 per cent you go to 220 000 vehicles,” he said.
Lamprecht says South Africa has one of the most competitive trading environments in the world. Consumers could choose from 53 passenger car brands and 3 236 model derivatives in 2017. In the light commercial vehicle segment there were 34 brands and 698 model derivatives available. This means South African car buyers were afforded the widest choice-to-market-size ratio anywhere in the world.
Nico Vermeulen, director of Naamsa, said the catalyst for the industry’s extraordinary export performance had been the Motor Industry Development Programme introduced in September 1995 and its successor, the Automotive Production and Development Programme introduced in 2015.
Vermeulen said that the post 2020 programme had not yet been finalised, but stressed that to sustain the industry’s remarkable and extraordinary export track, it was absolutely imperative it continued to enjoy globally competitive levels of incentives and support.
“If that is not the case, we will start losing to the likes of Morocco,” he said.