SA Exports Plummet in 2024 Amidst Affordable Chinese Competition

While new vehicle sales throughout the year proved to stabilise following initial challenges, it is SA exports that should be the cause for some concern, after plummeting by more than 20% in output from 2023. SA Exports

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South Africa is an importer and an exporter of new vehicles with locally manufactured vehicles sold both internally and in other parts of the world. The Automotive Business Council adds that 2024 was a year that like normal, is closely tied to broader economic conditions in the country. New vehicle sales locally started off with some challenges but finished with a strong final quarter which promises continued growth in 2025. However, naamsa has added that the new vehicle market still hasn’t been able to recover to the 2019 pre-pandemic level in four years and is likely to be delayed for another year.

A look at the numbers according to naamsa: The new vehicle market registered its third consecutive month of year-on-year increase in December 2024, with aggregate industry new vehicle sales at 41 273 units recording an increase of 1 011 vehicles or a gain of 2.5% compared to the total new vehicle sales of 40 262 units during the corresponding month 2023.

At the onset of 2024, the new vehicle market was still only 0.9% below the pre-pandemic level of 536 612 units in 2019. The passenger car market increased year-on-year by 8.2% but light commercial vehicles fared the opposite with a loss of 10.3%. Sales of medium commercial vehicles increased year-on-year by 7.6% while heavy commercial vehicles and buses decreased by 11.8%.

The industry anticipated a year of two halves with a taxing first half of the year and with brighter economic prospects and an upswing in new vehicle sales during the second half of the year, which unfortunately did not materialise. New vehicle sales remained under pressure, continuing to reflect a shift in the matrix with various new entrants in the domestic market, in particular Chinese brands, offering options at the more affordable end of the pricing spectrum as consumers battled a tough economic climate. Despite a stronger year-end performance supported by strong seasonal sales to the vehicle rental industry, easing inflation and two interest rate cuts, new vehicle sales decreased by 3.0% to 515 712 units compared to the 531 775 units sold in 2023. An overall mixed bag on the local front, Naamsa detailed that SA exports were another topic that is also needing to be addressed.

Vehicle export sales in December 2024 continued their downward slope and at 25 931 units reflected a loss of 1 158 vehicles or a decrease of 4.3% compared to the 27 089 vehicles exported during December 2023 to end the year at 308 380 units.

Related: Top 10 Best-Selling Car Brands in SA — December 2024

For the first time since the impact of Covid-19 in 2020, vehicle exports have experienced a decline. The annual 308 830 units are down by a substantial 22.8% compared to the record performance of 2023 when the industry exported 399 594 units. Various factors impacted the plummeting in vehicle exports, including a slowdown in demand in the EU, the domestic automotive industry’s key export region, due to low economic growth, stricter emission rules, and competition from cheaper electric vehicle imports from China in the region, as well as the timing effect of new model introductions in the domestic market by a major exporting OEMs.

Related: Top 10 Best-Selling Automotive Brands Locally – October 2024

Naamsa went on to detail the importance of the South African automotive manufacturing sector and mentioned that two out of every three vehicles manufactured in South Africa are exported, enabling the domestic OEMs to reach a much broader consumer base beyond the South African market. Depending on the year, South Africa’s automotive industry can contribute as much as 5% to the country’s gross domestic product (GDP). This includes a slightly more sizable chunk from manufacturing against the smaller piece of the pie for retail.

Exports remain key to generating sufficient economies of scale and achieving improved international competitiveness. As an export-oriented industry, the domestic automotive sector has embraced the trade opportunities via the specific trade arrangements that South Africa has concluded over the past three decades, opening certain markets in Europe, the US, and Africa, among others.

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The post SA Exports Plummet in 2024 Amidst Affordable Chinese Competition appeared first on CAR Magazine.


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