Third quarter improvement, despite challenges

The employment levels of independent vehicle importers have increased for six consecutive quarters since the first quarter of 2021.

Erik mclean dhz Nez fgo unsplash

This is true both at these importers’ head offices and at dedicated dealerships.

This is revealed in the latest quarterly review of business conditions in the vehicle manufacturing industry for the third quarter of 2022 released by automotive business council, naamsa.

The review reveals that employment levels of independent vehicle importers at their head offices and dedicated dealerships increased by 19% to 7 711 people at the end of the third quarter this year from 6 471 people at the end of the first quarter in 2021 - and by 10.2% or 718 people compared to the third quarter of 2021.

The increase in employment at independent vehicle importers took place within the context of the 21.2% increase in total industry passenger car sales to 94 231 units in the third quarter of 2022 compared to the 77 752 units sold in the third quarter of 2021.

Total industry commercial vehicle sales increased by 8.7% in the same period to 43 730 units from 40 240 units.

Aggregate new vehicle sales increased by 16.9% during the third quarter of 2022 compared to the corresponding quarter in 2021 and gained 17.6% compared to the second quarter of 2022.

The CEO of naamsa, Mikel Mabasa, says the new vehicle market’s strong performance during the third quarter compared to the corresponding quarter of 2021 should be viewed in the context of the adverse economic disruptions, the cyberattack on Transnet’s operations as well as the adjusted COVID-19 level 4 lockdown restrictions impacting on the industry’s performance at the time.

Mabasa also attributes the strong performance of the passenger car segment during the third quarter of 2022 compared to the corresponding quarter 2021 to higher passenger car imports. This is a reference to the negative impact of semiconductor shortages on vehicle production globally.

Mabasa said the industry also recovered from the impact of the severe floods in KwaZulu-Natal and consequent logistics challenges experienced during the previous quarter.

However, Mabasa says annual consumer Inflation during the quarter reached a 13-year high, increasing to 7.8% along with the sixth consecutive increase in interest rates since November 2021 while September 2022 was also by far the worst month of the year in terms of the cumulative amount of load-shedding.

Mabasa says the higher stages of load-shedding seem to have an amplified negative impact on production and the South African economy as a whole but the recovery in business and leisure travel was providing some support to the new vehicle market to counter the growing pressures on household incomes.

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