ANOTHER DROP IN SALES: The National Association of Automobile Manufacturers of South Africa predicts new vehicle sales to remain flat in 2017. Image: iStock
Pretoria - The latest aggregated sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa) show that the decline in new vehicle sales continued in December.
A total of 41 639 vehicles were sold last month, a year-on-year decline of 15.3%. New vehicle sales for the year are down 11.4%, ending the year on 547 442 units; the lowest levels seen since 2010.
Will 2017 see the local auto industry recover? Will car prices drop or rise? What about vehicle exports? Naamsa answers these questions and more below:
What are 2017 vehicle sales expectations?
"2017 is expected to be another difficult year for the domestic SA auto industry, however, a modest improvement in new vehicle sales is expected during the second half of the year," reports the Naamsa.
Industry production levels, on the back of expected further growth in vehicle exports, should however remain in an upward phase.
Naamsa says its 2017 projections for South Africa reflect an expected improvement in GDP growth to around 1.5% (from 0.4% in 2016). Local political tensions are likely to reduce business confidence and the expected increase in taxes in this years’ budget will erode real purchasing power. Internationally, volatile and uncertain conditions are likely to prevail during 2017.
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The outlook for 2017 domestic vehicle sales by sector: Info by Naamsa
SA car exports to remain strong
Despite these considerations, the global economic outlook at this stage, remains positive and should continue to lend support to South Africa’s improving vehicle export performance. Ultimately, industry vehicle exports would remain a function of the performance and direction of global markets. Naamsa said: "Vehicle exports to Europe, Australasia, the United States, Asia and South America were expected to show further upward momentum."
Local car sales to 'remain flat'
The general expectation in the industry is that domestic new vehicle sales will remain fairly flat going into 2017. Naamsa remains hopeful, however, that on the back of the expected improvement in key economic indicators, domestic sales would regain some traction in the second half of 2017 with year over year growth perhaps settling in the 2.5% to 3.5% range and hold to around that level going forward.
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Factoring in the expected improvement in exports, domestic production of motor vehicles in South Africa was expected to show an increase from 604 000 vehicles produced in 2016 to close on 641 000 vehicles in 2017- an improvement in vehicle production of about 6.0% This figure could prove conservative if vehicle exports expand more than currently anticipated.
The projected higher vehicle production was consistent with the official vision for the Industry which is to remain a premier supplier of high quality, competitive automotive original equipment parts and accessories and vehicles to international markets and, in the process, to achieve an annual domestic vehicle production figure of close to 850 000 vehicles by 2020.
New models, self-driving cars
Internationally and domestically, vehicle manufacturers would continue to focus on new models and products through sustained investment and new technologies. Technologies such as artificial intelligence could begin to reflect a tangible impact across sectors. Autonomous vehicles and driver assisted automatic systems as well as increased use of information technology in vehicles were likely to feature in the future.