The trading environment in South Africa is extremely competitive compared to global standards, and in 2022 there were no fewer than 43 passenger car brands and 2 513 model derivatives for sale in the country, the greatest selection of market-size ratio found globally.
This is according to the 2023 Automotive Export Manual, which has just been released by the Automotive Industry Export Council (AIEC).
It said it was similarly competitive in the light commercial vehicle or bakkie segment in 2022, with South African consumers having a choice of 22 brands and 498 model derivatives.
Norman Lamprecht, a director of the AIEC and an executive manager at automotive business council naamsa, said the South African new-vehicle market’s recovery to pre-pandemic levels continued in 2022 but at a slower pace than in 2021.
The new-vehicle market registered 12 consecutive months of year-on-year growth in 2022, with sales increasing by 14% to 529 562 units in 2022 from the 464 493 units sold in 2021.
Sales of passenger cars accounted for 68.7% of total sales and light commercial vehicles (LCVs) 25.6%.
The manual said new-vehicle sales through the dealer channel, which is representative of consumer activity, comprised 84.3% of total sales in 2022.
It added that total new vehicle revenue, based on the available list price, amounted to R255.7 billion in 2022.
South Africa had a vehicle parc, based on the number of registered vehicles, of 13.30 million at the end of 2022, of which 7.87 million or 59.2%, comprised passenger cars.
The manual said the average age of the passenger car parc in 2022 increased to 10 years and six months.
Lamprecht said the import of replacement parts increased by 15.9% to R79.19 billion in 2022.
“The proliferation of light vehicle aftermarket parts is driven by factors such as the growth of vehicle imports, increasing vehicle age, advancing vehicle technology, and economic pressures on consumers,” he said.
The manual said imports of light vehicles increased by 23.5% to 323 800 units in 2022 in line with the 14.0% year-on-year increase in the domestic new vehicle market in 2022.
It said passenger car imports accounted for 80.0% of total passenger car sales of
363 696 units in 2022, while light commercial vehicle imports accounted for 23.5% of total light commercial vehicle sales of 135 713 units in the year.
The top country of origin, in volume terms, for passenger cars and LCVs imported into South Africa in 2022 was India, which accounted for 51.2% or 165 910 imported vehicles, while China moved into second place and accounted for 10.8% of total light vehicle imports as Chinese brands continued to gain traction.
However, the manual revealed that seven out of the top 10 selling models in 2022, were South African manufactured models, of which four were bakkies and three passenger cars.
In 2022, new diesel passenger car and light commercial vehicle sales accounted for 29.6% of the market share of total light vehicle sales, a decline from 33.7% in 2021.
New energy vehicles (NEV) increased year-on-year by 421.7% to 4 674 units by 15 brands in 2022 from 896 units in 2021.
The sale of battery electric vehicles breached the 500 units a year mark in South Africa for the first time ever, with sales of 502 units in 2022.
Lamprecht said the global automotive industry was currently at an important crossroad, and original equipment manufacturers (OEMs) will need to accelerate the development of a new NEV business while simultaneously running the legacy internal combustion engine (ICE) vehicle business.
He said to achieve this business-model duality, OEMs and their component suppliers will need to make dramatic changes and fundamentally reshape their business models.
Lamprecht added that the global transition towards NEVs was inevitable and South Africa’s rapid adaption was critical for the domestic automotive industry’s long-term success and growth.
He said the only way to have a successful automotive manufacturing base was to keep up with global technological developments.
“However, despite lower running costs, the high upfront purchasing cost of NEVs, linked to higher production costs, mainly related to battery production, is still the main inhibitor to increased NEV uptake in South Africa.
“NEVs represent a huge ecosystem, and with the transition to eco-friendly vehicles, the domestic automotive industry’s collective success has never been so closely tied to engagement with other sectors of the economy and across government.
“The future of the industry depends on all stakeholders, policy makers, businesses and consumers advancing to the same destination and thereby changing the way the world drives,” he said.
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