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| Exports is where South Africa's car builder will see profits in 2019. |
THE National Association of Automobile Manufacturers of SA (Naamsa) expects modest improvement at best in domestic new vehicle sales versus further relatively strong growth in vehicle exports and domestic production for 2019.
In a statement, Naamsa on Tuesday predicted 558 000 local sales for 2019, which represents a flat market with about 1,0% growth that divides into:
• 368 000 cars
• 162 000 bakkies
• 8 000 medium trucks
• 20 000 heavy and extra heavies.
In contrast, vehicle exports are expected to grow 8,0%, to reach about 385 000 units in 2019, compared to last year’s 351 154 units. Most of these exports were shipped out by BMW, Mercedes-Benz, Toyota, Ford, and VW.
In December, these shipped 30 959 of the total of 31 437 units exported.
In 2019, SA’s vehicle builders are expected to build about 657 500 vehicles in total, which includes domestic sales and exports.
Naamsa advised dealers that buyers will continue to buy down, with the focus on entry level cars, small bakkies and vans, and cross overs.
The premium car segment will continue to experience “significant pressure”.
Naamsa also welcomed the announcement at the end of November 2018 by Minister of Trade and Industry, Dr Rob Davies, to extend the Automotive Developmental Policy Regime from 2021 through the end of 2035.
When the extended programme starts in 2021, support and incentives for vehicle manufacturers and assemblers, including BAIC, BMW, Mercedes-Benz, Toyota, and VW, will reduce significantly and the only means for vehicle producers to recoup benefits will be through substantial increases in localisation — while remaining internationally competitive in terms of exports.
