Auto component exports increase in 2020 despite COVID-19

Driven by exports of catalytic converter exports to EU, which are at risk with shift to electric vehicles.

Despite the extreme effect of COVID-19 lockdowns on the automotive trade globally, South African automotive component exports were recorded at R54.5 billion in 2020 from R53.7 billion in 2019.

This improvement was attributed to catalytic converter exports of R25.98 billion, primarily to Europe in line with stricter emissions laws. Catalytic converter exports accounted for 47.7% of automotive component exports in 2020.

“It just shows that despite huge setbacks suffered because of the pandemic, there are always opportunities in the industry,” stated Norman Lamprecht, a director of the Automotive Industry Export Council (AIEC) and a government supervisor at automotive council Naamsa, on Friday when releasing the Automotive Export Manual 2021.

Lamprecht stated the opposite spotlight in 2020 was the document funding of R9.2 billion by the seven native unique gear producers (OEMs).

“Typically when the OEMs make investments, there’s a observe technique by the multinational component suppliers who additionally invested R2.4 billion in 2020.”

“South Africa’s share of global motor vehicle production in 2020 decreased to 0.58%, from 0.69% in 2019, with the country’s ranking remaining at 22nd in the world,” the report said.

South African vehicle production fell by more than 29% in 2020 from the previous year, accelerating past a global decline of 15.8%.

“Following record vehicle production of 631 921 units in 2019, vehicle production declined by a substantial 184 703 units, or 29.2% to 447 218 units in 2020. However, second quarter 2021 total vehicle production reflected a massive increase of 173% compared to the corresponding COVID-19 affected second quarter 2020 as the recovery in vehicle production continued in 2021, supported by robust global demand as well as a strong recovery in the domestic new vehicle market,” the report said.

“South Africa remained the dominant market on the African continent, and accounted for 447 218 vehicles, or 62.1% of total African vehicle production of 720 156 vehicles.”

Crucially, the automotive sector is still creating jobs, though not in a big way. The number of employees on the payroll of independent vehicle importers at their head offices and dedicated dealerships rose to 6 577 at the end of the second quarter from 6 471 at the end of March – an increase of 106.

This comes against the backdrop of a 153% spike in new car sales in the second quarter compared with the same period last year – when the sector was reeling from the initial hard lockdowns – to
71 345 units. Sales have clearly been underpinned by low interest rates, with the prime rate still at 7.0%, its lowest level in more than five decades.

Exports in the first half of 2020 shot up by 66% from the corresponding period last year to 180 817.