Toyota expects market to return to pre-2019 this year

Toyota South Africa Motors (TSAM) President and CEO, Andrew Kirby, is forecasting that new vehicle sales will grow by 16.3% to 540 000 units this year from the 464 469 units sold in 2021.

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But Kirby stressed that the importance of the forecast sales number is that it will mean the market would have grown compared to what the industry achieved in 2019.

“This means that as an auto industry in South Africa, we would have fully recovered from the COVID-19 environment,” he said during his fifth State of the Motor Industry (SOMI) address at the Kyalami Racetrack and Conference Centre last week.

This forecast differs significantly from that of other forecasts by automotive stakeholders and analysts, who are only expecting the industry to fully recover to pre-COVID-19 sales levels a year later in 2023.

Kirby says the breakdown for this year’s forecast includes 334 800 passenger models, 178 198 light commercial vehicles (LCVs) and a total of 27 002 medium and heavy commercial vehicles.

“The extrapolation (540 000 units) is based on a variety of socio-economic factors that do not bode well for the local motor industry, including the rising interest rate cycle, the strain taken by the agricultural sector owing to heavy rainfall, the muted tourism recovery as well as possible market instability owing to ANC leadership elections and NBF [National Bargaining Forum] wage negotiations,” he said.

Kirby reckoned the total 464 469 new vehicle sales in 2021 was 22% higher than the sales achieved in 2020 but, to put that in perspective, total sales in 2021 were still 13% below 2019 pre-COVID-19 sales.

However, Kirby said his 2022 new vehicle sales forecast was “constrained”, and sales volumes would be much higher if there was an improvement in the availability of new vehicle stock, in shipping delays and semiconductor supplies, especially in the last six months of 2022, and if there were some structural improvements in the South African economy.

“We are almost saying the minimum level will be 540 000 units. If you look at the seasonally adjusted rate in January [2022], that came in at 494 000 and we know that that was significantly constrained in terms of supply.

“So, the national market was already standing at 540 000 in January of this year. We are, therefore, very comfortable that we will at least achieve 540 000 unit sales this year,” he said.

Kirby said despite the anticipated growth in the market forecast for 2022, the market would still be softer than where it was six years ago.

However, Kirby believed the new vehicle market would recover to the 600 000 units a year level again over the next few years.

TSAM Senior Vice-President of Sales & Marketing, Leon Theron, said their primary focus in 2022 would be on new energy vehicles (NEVs), spearheaded by the new Toyota Cross hybrid, and they would try to maximise these sales as much as possible.

Theron said Toyota had a 50% share of the NEV market in 2021 and Lexus an 18% share but with the launch of the Toyota Cross hybrid in November and December 2021, TSAM’s combined share of the NEV market increased from 68% to 77%.

He said TSAM wanted to have a 40% mix of passenger vehicle NEVs by 2025.

“That is how aggressive we are with new energy vehicles going forward. Our roadmap is very clear on new energy vehicles. Its hybrid, plug-in hybrid and battery electric will follow,” he concluded.

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