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Sharp decline in South African car exports to rest of Africa

05 April 2017 | Gareth Tredway

SA car exports_optExports from South Africa to the rest of Africa continued their downward trend in 2016, almost halving in number, according to the latest quarterly update from the National Association of Automobile Manufacturers of South Africa (Naamsa).

Back in 2014, other African countries were together the second largest export destination behind Europe for South Africa; they are now the second smallest – just ahead of South America.

Naamsa says the drop in exports was due to a number of factors, including ad hoc duty increases in countries like Nigeria and Zimbabwe, regulatory restrictions in Algeria and continued weak economic conditions in most African states.

This trend was also evident in South Africa itself, where new vehicle sales declined by 11.4% in 2016 compared to 2015.

In total 21,564 locally manufactured passenger vehicles were exported to Africa, compared with 42,234 in 2015 and 61,839 the year before.

With 335,539 passenger vehicles produced in 2016, South Africa’s total domestic production fell short of the record 341,035 cars produced a year earlier. Exports, however, were higher at 237,715, compared with 228,459 a year earlier.

Exports to Europe made up for the shortfall of supply to other African countries, with 195,764 vehicles shipped to the region in 2016, 12.6% more than the 173,805 in 2015 and a 69% increase on the 116,077 cars exported to Europe in 2014. 

Exports to Asia were also up, growing by 38.8% to 47,616 from 34,306 a year earlier.

In the light commercial vehicle (LCV) category, South African production fell to 235,351 units in 2016 from 243,454 a year earlier.

The association’s forecast is for a new record of 358,000 passenger vehicles to be produced in 2017. Almost 30% of these cars are destined for the local market. LCV production is expected to reach 253,000, meanwhile.

The Naamsa update also showed aggregate industry employment levels declined by 1,900 jobs to 29,489 positions by the end of December.

Capacity utilisation levels showed year-on-year reductions in the car, light and medium commercial vehicle manufacturing sectors, while there was an improvement in the heavy truck sector.

Total capital expenditure in the South African automotive sector is estimated to have totalled R6.42 billion ($465m) in 2016 and is forecast to increase to R8.17 billion during 2017.

Tagged with: Africa, Commercial Vehicles, Exports, Finished Vehicles, OEMs, Production, South Africa