While South Africa works its way through the impact of the latest economic headwinds, the automotive sector is holding its own in a volatile market, Econometrix director and chief economist Dr Azar Jammine said at a pre-Automechanica business briefing. The trade fair will be held at the Johannesburg Expo centre, near Soweto, from September 27 to 30.

Despite an expected contraction in domestic vehicle production and sales this year, the automotive sector remains a large player among South Africa’s exporters, with ample opportunities for further growth in Africa opening up opportunities for the components and parts sector.

It is expected that new passenger vehicle output will contract by 2.9%, light commercial vehicles (LCVs) by 1.9%, medium commercial vehicles (MCVs) by 1.2% and heavy commercial vehicles (HCVs) by 0.7% this year.

However, by 2018, production will swing back into positive territory, with passenger vehicle production growth of 2.9% expected, along with a 0.4%, 0.8% and 0% growth expected for LCVs, MCVs and HCVs respectively.

Further, the downward trend in sales, following a “hammering” of the new-vehicle sales market over the past few years, positively benefits the parts and components sector over the next few years.

“Given the fact that there is traditionally a three- to five-year lag between new vehicle sales and replacement parts, this suggests that, by 2020 or so, we could see quite a boom in the parts industry, both for LCVs and HCVs,” he said.

In addition, the automotive sector is experiencing growth within the overall lacklustre manufacturing industry.

“Manufacturing itself is going nowhere fast, at 0%, yet the share of the automotive industry within overall manufacturing keeps rising. This translates into an improvement in the gross domestic product share of the automotive industry, including parts manufacture.”

South Africa is the biggest vehicle market in Africa – accounting for 37% of passenger vehicle sales and 56% of commercial vehicle sales in 2016 – followed by Egypt and Morocco.

The automotive export share as a percentage of South Africa’s total mechandise exports has risen to an all-time high of 15.6% and the country’s export markets, including Germany, Belgium and the UK, remain strong, with the European Union accounting for 50% of the country’s exports.

Exports to Africa are also rising.

The continent currently accounts for 18% of South Africa’s automotive exports.

There are outstanding export prospects immediately to the north of us, as other African economies, particularly East Africa, boast attractive economic growth over the next few years.

Further, South Africa’s trade balance has also improved, contracting from a trade deficit of R42.3-billion in 2012 to R32.9-billion in 2016.

Automotive imports were up 48.7% from 2012 to 2016 and exports were up 80.3% over the same period.

Automechanika will be co-located with Futuroad Expo, an international truck, bus and trailer show that replaces the Truck and Bus show of the Johannesburg International Motor Show, and Scalex Johannesburg, a trade fair for transport systems, infrastructure and logistics solutions.