Share
COVID-19: NAAMSA CEO on SA’s vehicle sector outlook for 2020
One of the hardest hit industries during the Covid-19 crisis is the automotive sector, with South Africa’s new vehicle sales for the month of May plunging by 68 per cent in and 98 per cent in April. The slowdown in car manufacturing and consumer purchasing power was due to the strict Covid-19 lockdown that was implemented by the South African government at the end of March. Joining CNBC Africa for more is Mike Mabasa, CEO, National Association of Automobile Manufacturers of South Africa.
Wed, 03 Jun 2020 10:41:27 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The automotive sector in South Africa faces significant challenges due to a sharp decline in new vehicle sales and manufacturing amid the COVID-19 pandemic.
- Industry experts are cautiously optimistic about a gradual recovery in the coming months, although a full return to pre-pandemic levels remains uncertain.
- South Africa's export industry, while resilient, is under pressure from economic uncertainties and external factors like Brexit and changing trade policies.
In the heart of Johannesburg, one of the global car capitals, the automotive sector is grappling with the harsh realities brought on by the COVID-19 pandemic. South Africa's new vehicle sales plummeted by 68% in May, a slight improvement from the staggering 98% decline witnessed in April. The industry has been heavily impacted by the slowdown in car manufacturing and a significant decrease in consumer purchasing power, all attributed to the strict lockdown measures imposed by the South African government in late March. To shed more light on the current state of affairs in the automotive sector, Mike Mabasa, the CEO of the National Association of Automobile Manufacturers of South Africa, joined CNBC Africa for an insightful discussion. Mabasa expressed cautious optimism for the months ahead, given that the industry is now operating at full capacity under level three restrictions. He anticipates a gradual improvement in June and July, albeit acknowledging that the sector will not return to pre-pandemic levels anytime soon. Against the backdrop of a struggling economy and declining domestic vehicle sales over the past five years, concerns linger regarding the industry's resilience amidst ongoing challenges. While South Africa has leveraged a robust export business to offset declining domestic sales, the country's economic woes, compounded by the COVID-19 crisis, suggest a prolonged road to recovery. Despite export opportunities in 151 markets and a steady annual growth rate, uncertainties loom over the impact of Brexit and the Trump administration's trade policies on South Africa's export industry. However, Mabasa remains hopeful that the country's reputation for producing quality vehicles at competitive prices will continue to attract international buyers and sustain export growth. Additionally, amidst the pandemic, major car manufacturers such as Volkswagen, Ford, and Toyota in South Africa have demonstrated solidarity by actively contributing to the fight against COVID-19. Companies like VW and Ford have pivoted to producing ventilators to support the government's healthcare efforts, while Toyota has focused on manufacturing masks for frontline workers. These collaborative efforts underscore the industry's commitment to making a meaningful impact during these challenging times. As South Africa's automotive sector navigates the complexities of a post-COVID landscape, resilience, innovation, and global partnerships will be crucial in steering the industry towards a path of recovery and growth.
SIGN UP FOR OUR NEWSLETTER
DAILY UPDATE
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.