The annual growth in new vehicle sales is a sign of economic recovery, but like most other economic indicators remains short of the levels obtained before the pandemic.  

According to the Automotive Business Council, also known as Naamsa, new vehicle sales climbed 22.1% to 464,122 units in 2021. That is still well short of the 536,612 units sold in 2019, that golden year that came before the pandemic spread its misery across the globe. 

“With a GDP growth rate forecast of a moderate 1.8% in 2022, the new vehicle market is expected to continue its gradual recovery during the year, but at a slower pace and at this stage a year-on-year improvement of around 8% in aggregate new vehicle sales volumes is projected for 2022,” Naamsa said.  

“Many Covid-19 disruptive elements are expected to remain in play in 2022 and prevailing market conditions will continue to be hampered by escalating cost increases and supply chain disruptions, such as the global semiconductor shortages impacting on the availability of certain models,” it said.  

On the export front, things were kicking nicely into higher gear until the July riots and Transnet’s woes combined to produce a giant sinkhole in the road.  

“Vehicle exports at 295,268 units in 2021 reflected an increase of 23,980 vehicles or a gain of 8.8% compared with the 271,288 vehicles exported in 2020. For the first half of 2021, vehicle exports were still on par with the record pre-Covid-19 vehicle export performance of 2019 but unfortunately the civil unrest in Gauteng and KwaZulu-Natal, as well as the force majeure declared by Transnet after the cyberattack during July 2021, left a major scar on the country’s economy,” Naamsa said. 

“Consequently, the upward momentum in vehicle exports ground to a halt.” 

This is yet another example of how the costs and consequences of the July mayhem are still being tallied, highlighting the scale of the risk that social unrest poses to South Africa’s fragile economy – a point that will hardly be lost on investors. DM/BM