This quarter-on-quarter slump in new vehicle sales in the second quarter of 2022 – as reported by the automotive business council naamsa – occurred despite the strong performance of the passenger car segment during the second quarter of 2022 compared to the corresponding quarter in 2021.

naamsa attributed this to higher passenger car imports as well as sound support from the vehicle rental companies in the second quarter in 2022.

It said the slowdown in momentum in new vehicle sales during the second quarter of 2022 compared to the previous quarter could be attributed to the impact of the severe floods in KwaZulu-Natal on vehicle production and sales, logistical import and export challenges at the Durban port and a weak economic climate.

Passenger car sales were 11.7% lower in the second quarter of 2022 than the first quarter of the year, while car sales in the first quarter were 15.9% higher than in the fourth quarter of 2021.

Similarly, light commercial vehicle sales were 22.8% lower in the second quarter of 2022 than in the first quarter of the year, when sales increased by 14.7% compared to the fourth quarter of 2021.

naamsa’s latest quarterly review of business conditions in the new vehicle manufacturing sector highlighted the cause of the slowdown of new vehicle sales in the second quarter of 2022.

It said that domestic new vehicle production declined by 17.0% in the second quarter of 2022 compared to the corresponding quarter in 2021.

“The massive decline in the light commercial vehicle segment could be attributed to the impact of the severe floods in KwaZulu-Natal and the temporary closure of the Toyota Prospecton plant during the quarter, as well as the ongoing global shortage of semiconductors affecting vehicle production,” it stated.

The review reckoned average production capacity utilisation for passenger cars slumped from 86.3% in the first quarter of 2022 to 61.1% in the second quarter, with production capacity utilisation hitting a high of 99.1% and a low of 4.5% in the second quarter of 2022.

Average production capacity utilisation for light commercial vehicles also fared badly, slumping from 63.1% in the first quarter of 2022 to 46.3% in the second quarter, with a high of 92.0% and a low of 29.8% in the second quarter.

naamsa also revealed that new energy vehicle (NEV) sales took a hit in the second quarter of 2022.

NEV sales during the second quarter of 13 industry brands declined by 47.3% from 1 401 unit sales in the first quarter to 738 units in the second quarter.

However, naamsa highlighted that a total of 2 139 NEVs were sold in the first half of 2022 compared to the total 896 NEVs sold during the full year in 2021.

In its report, naamsa also referred to the Automotive Green Paper on the advancement of NEVs in South Africa, which was published on May 18, 2021 by the Department of Trade and Industry and Competition (DTIC).

It stated the Green Paper highlighted that the NEV challenge in South Africa was two dimensional, encompassing both demand and supply side considerations, and that it was an inevitable transition for the South African automotive industry because it would be the future driving technology adopted by the global automotive industry.

“The outcome of the jointly funded 2022 naamsa and DTIC NEV research study will aim to develop an appropriate fiscal and regulatory framework that will make South Africa a leading, highly competitive location for global NEV production,” it stated.