Naamsa | The Automotive Business Council says it is concerned about the potential global impact of the Russian invasion of Ukraine.
“The current hostilities pose another potential global supply chain challenge for the auto industry, because of Europe’s strategic significance to the global automotive ecosystem,” says the auto industry body.
Europe is South Africa’s main new-vehicle export market. South Africa also imports a number of parts for its assembly plants, as well as fully built-up vehicles from Europe.
“The confrontation between Russia, on the one hand, and Ukraine, the European Union (EU), the US and their allies in the West, on the other hand, comes at [a] time when the global auto industry is still working to recover from the impact of Covid-19, the global shortages of semiconductors, as well as many other supply-chain-related challenges experienced since the beginning of 2020,” says Naamsa.
“We don’t need another global economic disruption. The ripple effect of Russia’s invasion also holds negative consequences for the rand, oil prices, food prices, financial markets, as well as potential earlier and bigger interest rate hikes by the South African Reserve Bank to curb inflation.”
February was too early for the market to register any potential consumer unease about Russia’s aggression, with domestic new-vehicle sales increasing by 18.4%, to 44 229 units, compared with the same month last year.
Of total industry sales, an estimated 84.9% represented dealer sales, with 10.1% of vehicles entering the country’s rental fleets. About 1.2% of new vehicles were sold to industry corporate fleets, with the remaining 3.8% procured by government.
The new-passenger-car market reached 29 563 units in February, a 22.4% gain on the same month last year.
Sales of new bakkies, vans and taxis increased by 9.4%, to 12 290 units.
Medium-truck sales grew by 7.5%, reaching 572 units, while heavy-truck and bus sales jumped by 23.5%, to 1 804 units.
February new-vehicle exports from South Africa increased by 12.3%, to 32 867 units.
Following a downward trajectory in export sales since the second half of 2021, the increase during the month could, potentially, mark the start of a renewed
upward momentum in vehicle exports for the balance of the year.
Looking ahead, the industry body says the recent growth-positive National Budget provided some good news for business and consumers, with a cut in corporate income tax, adjustments to personal income tax brackets, and a zero per cent hike in both the fuel and Road Accident Fund levies.
However, this relief may be short-lived as fuel prices have now hit record highs.
The vehicle emissions tax rate on passenger cars and double-cab bakkies will also increase from April 1.