Local auto industry unites at SA Auto Week

On 11 October 2023. naamsa, the Automotive Business Council, officially commenced its annual SA Auto Week at Gallagher Estate in Gauteng.

SA Auto Week, which also forms part of the country’s Transport Month activities, is the local automotive industry’s premium networking and thought leadership conference and exhibition that runs from 11 to 13 October.

The council represents 42 passenger vehicle brands, 22 light commercial and 20 medium and heavy commercial vehicle brands.

“SA Auto Week brings together all the role players in the industry to discuss its accomplishments and future, highlight the latest technologies and debate policies currently under consideration,” says Mikel Mabasa, CEO of naamsa.

“It also creates a platform to discuss and manage the challenges presented by the global and local economy together, to ensure that the right decisions are made to support South Africa’s growth ambitions.”

The local automotive industry is seen as the largest manufacturing industry in the South African economy and last year contributed around 4.9% to the country’s annual GDP. It directly employs 497 408 people formally and informally, which is 2.9% of the 16.2 million people employed in SA.

More importantly, the SA auto industry also exports products to 152 markets and generated R227.3 billion in export revenue for the country last year.

“The local automotive industry makes an extraordinary contribution to South Africa’s prosperity, and that is why it is important to secure its viability and growth, now and into the future,” says Mabasa.

Also on the agenda was the highly anticipated announcement of a balanced New Energy Vehicle (NEV) policy by the South African government, accounting for both environmental factors (early adoption) and production support (investment mobilisation). This announcement is expected early in November 2023.

“As an industry reliant on exports to markets like Europe, who has shifted away from ICE vehicles, we have to be able to adapt and meet these stringent demands in order to continue delivering vehicles there and to other similar markets,” said Billy Tom, naamsa President and CEO of Isuzu Motors South Africa.

“Locally, our approach to the continued introduction of NEVs will need to take into consideration aspects like charging infrastructure and offering the correct balance between hybrid, plug-in and Battery Electric Vehicles.”

For the year-to-date August 2023 compared to the same period last year, plug-in-hybrid vehicle sales increased by 37.0%, traditional hybrid increased by 54.9% and electric vehicles increased by 128.5%. The NEV sales of 4 674 units accounted for 1.23% of total new vehicle sales recorded during this period.

Despite challenging market conditions, the industry has displayed a modest yet commendable resilience in overall year-to-date new vehicle sales and export performance for September 2023. Factors like heightened inflation, fuel costs, electricity prices and food costs are forcing buyers to buy down and opt for more affordable cars.

Looking ahead, naamsa expects the new vehicle market to remain under pressure and the organisation has a subdued outlook over the medium term.

Other macro-economic factors that are expected to impact the SA vehicle market include continued loadshedding, commodity price fluctuations, backlogs at ports, as well as infrastructure deterioration of road and rail networks. Automotive legislation that is expected to affect the industry includes the constitutional ruling on the validity of AARTO, grey import strategies and the Automotive Production Development Policy (APDP2).

Tom said that naamsa’s vision continues to aim to be the “most credible organisation that forms part of a globally competitive transformed automated industry that actively contributes to the sustainable development of South Africa.

The remainder of the first day of SA Auto Week, naamsa also hosted presentations on the status of the manufacturing and retail aspects of the industry, attracting more investment to South Africa and transformation of the industry beyond compliance.

In the days ahead, presentations and discussions at SA Auto Week will focus on the country’s transition to NEVs, transport policy topics and energy security. South Africa’s Deputy President, Hon Paul Mashatile, will address the conference on Friday and engage in round table talks with key industry role players.

naamsa will also present its annual Accelerator Awards to the best industry performers in various categories during its gala event on Friday evening.