This is expected to remain unchanged in 2016 as consumers look to the very attractive second-hard vehicle market. Very slight growth in new vehicle sales is expected in 2017 in South Africa.
Source: Cape Business News
Vehicles exports from South Africa are increasing and automakers see opportunities to use South Africa as a base for vehicle manufacturing. They’re targeting foreign export markets like Europe.
Source: Engineering News
Auto manufacturing accounts for 7.5 percent of the country’s gross domestic product and 33.5 percent of the country’s manufacturing output.
Source: Cape Business News
The concept of car ownership is changing globally with a significant shift to carpooling and ride sharing in congested European cities. This trend is not expected to be adopted in sub-Saharan Africa, where vehicle ownership is still seen as aspirational. The auto market is relatively new in sub-Sahara compared to more mature European and American markets.
Source: Engineering News
Despite new vehicle sales continuing to fall in South Africa, key automakers BMW, Toyota, Volkswagen, and Ford have all increased investment in South Africa’s automotive sector, expanding operational and auto manufacturing capacity. This investment is seen as positive not only for South Africa as a manufacturing hub but for the continent as a whole.
Source: Engineering News
Ongoing support and stimulation from South Africa’s Department of Trade and Industry resulted in the Automotive Production and Development Programme, which runs to 2020, and its predecessor, the Motor Industry Development Programme. Both contributed to the local auto industry’s growing international competitiveness.
Source: Cape Business News
South Africa’s strong auto incentive programs resulted in huge amounts of capital investment over the years, including R24bn ($1.7 billion US) between 2011 and 2015, with R7,6bn ($536 million) slated for investment in 2016.
Source: Cape Business News
Toyota has invested 6.1 billion rand ($428.5 million US) in its Durban plant, BMW is set to invest 6 billion rand ($421.5 million) in its Rosslyn plant. VW earmarked 4.5 billion rand ($316 million) investment for its Uitenhage plant and Ford planned for 2.5 billion rand investment ($175.6 million) in its Rosslyn plant. Mercedes Benz invested 3 billion rand ($211 million) in its East London plant in 2013-2014. Indian motor company Mahindra & Mahindra said it plans to manufacture in South Africa with an investment in the East London industrial development zone.
Source: Engineering News
China’s government-owned Beijing Automobile International Corporation said in August it plans to invest $823 million in a new automotive manufacturing plant in Port Elizabeth, South Africa. It’s the biggest auto investment in Africa in 40 years. The new facility in the Eastern Cape’s Coega Industrial Development Zone is expected to produce between 40,000 and 50,000 cars a year. This cars will be sold in South Africa and the rest of the continent.
Source: BRICS Post
South Africa’s local demand for new vehicles has tapered off due to sluggish economic growth in 2015. Growth of 0.6 percent is expected in 2016 and 1.3 percent in 2017. New vehicle sales are expected to remain slow in South Africa until at least 2018.
Source: Engineering News
The 650, 000 vehicles manufactured in South Africa in 2015 account for just 0.7 percent of total global output. The industry objective is to increase this to 1 percent by 2020.
Source: Cape Business News
Macro economic factors include high interest rates, a weak rand and ongoing fluctuations in the fuel price. Other major influencers affecting the industry include rapid advances in technology, new players in the auto industry such as Uber, Google and Tesla, and changing consumer behavioral patterns.
Source: Cape Business News
However Nissan and BMW are jointly expanding South Africa’s network of electric vehicle charging stations. This is expected to increase sales of electric vehicles in the future.
Source: Cape Business News
