Sunday , September 20 2020
Breaking News
Home / International Customs / South Africa poised for further growth in motor sector
South Africa poised for further growth in motor sector

South Africa poised for further growth in motor sector

CAPE TOWN: Having been in the automotive industry for some 30 years, I have experienced the good and the bad times. Being at the mercy of the economic gods comes with the territory. But through it all, we remain strong and vibrant.

We are in a downturn. On the domestic front is low economic growth, a weak rand and high consumer debt. Elsewhere on the continent has been the dramatic fall in the oil price, an inability to raise foreign exchange, currency fluctuations and inflation. This has had a knock-on effect on industry sales in South Africa and in many sub-Saharan African countries where growth is well below expectations.

Make no mistake. Our industry has stood the test of time and continues to play a significant role in our economy. Sales and production, particularly exports, were expected to contribute about 7 percent to South Africa’s gross domestic product (GDP) last year.

Much of our export growth is in Africa where automotive companies have realised the potential of sales driven by a growing middle class. South Africa stands to benefit from the coming mobility revolution north of the Limpopo. But as the automotive industry takes advantage of the huge potential that Africa has to offer, we also recognise the need to adjust to changes in the sales environment. We fully expect that economic headwinds will remain this year. Falling currencies are already eating into consumers’ spending power.

As a result, one of my foremost automotive industry predictions for this year was that we would see a growth in affordable cars. Customers across the continent want value for money without foregoing the smart, accessible technology most cars today offer. Cars are a vital part of this country’s manufacturing base, borne out by the fact that our automotive industry is one of the top 25 global markets. Together as manufacturers we produce 600 000 vehicles annually, supporting more than 100 000 manufacturing jobs and contributing around 7 percent of GDP.

As the automotive hub for sub-Saharan Africa, our industry is poised to be a key driver of growth for the future. To fully benefit from the growth in the continent, the South African automotive industry needs the support of the government.