The Motor Vehicle Industry in South Africa 2024

Challenges

Shortages of skilled labour and the need to upskill workforce. Adoption of renewable energy. Consumer preference for affordable and used vehicles. Energy constraints and reliance on alternative energy. Illegal import of grey vehicles and influx of counterfeit parts Increasing input costs. Limited infrastructure and high cost of EVs. Political unrest and strike action. Reduced consumer income. Significant competition from affordable imports from Asia. Stricter emission standards. Supply chain disruptions.

Introduction

Vehicle manufacturing is a major manufacturing sector, with vehicle and automotive component manufacturing accounting for over 20% of manufacturing output in 2023. Record high vehicle exports saw the automotive industry outperform the rest of the manufacturing sector in 2023, but growth slowed from January to August 2024. Weak consumer confidence and economic pressures have reduced demand for new vehicles. Changing consumer preferences are having a significant impact on the market. Manufacturers are facing ongoing supply chain disruptions and supply challenges for key components.

Opportunities

Export to Africa. Adoption of renewable energy. Demand for specialised technology and advanced vehicle services. Digital omni-channels and ecommerce platforms. Digital transformation and growth in data analytics. Expansion of NEV market. Higher demand for aftermarket and service industry. Import of more affordable vehicles. Local production of EVs. Localisation of component manufacture. Production of batteries for EVs or supply of key raw materials. Recycling and circular economy. Supply chain diversification with local suppliers filling gaps. Training and upskilling. Used vehicle market expansion.

Outlook

An increase in vehicle production is expected in 2025, but it may be modest. NEVs are expected to expand gradually, and accelerate in the medium term as battery prices drop, more models enter the market and charging infrastructure expands. Economic conditions are limiting consumer access to vehicle financing and suppressing new vehicle sales. Consumers are opting for longer payment terms and not replacing cars as often as they did in the past, resulting in pressure on sales. Cheap vehicle imports are expected to have a significant impact on market share. There is expected to be growth in aftermarket services as consumers hold onto vehicles longer. Manufacturers and retailers will require investment in upskilling for NEVs and advanced technologies.

Report Coverage

This report focuses on the motor vehicle industry, including the manufacture, distribution, servicing and maintenance of motor vehicles and the manufacture of automotive components. The report includes comprehensive information on production trends, manufacturing and vehicle sales and prices, key industry performance indicators, new energy vehicles, used vehicles and exports. There is information on dealerships and the vehicle aftermarket, notable players, corporate actions and regulations. The report includes profiles of 92 companies including notable manufacturers and importers such as Toyota, VW, BMW, Mercedes-Benz, Ford and Nissan, parts and accessories companies such as Hudaco and PG Group, dealerships including CFAO, McCarthy, Stellantis, Super Group and We Buy Cars, and fitment centres such as Glasfit and Hi-Q.

Trends

Consumer demand for smaller, cheaper and more fuel-efficient cars. Continued focus on local production, domestic sales and exports to Africa. Demand reduced by low consumer confidence and economic pressures. Expansion of EV charging infrastructure. Growth of digital sales channels and online platforms. Increasing importance of used vehicle market and growth in sales. Investment in technology and R&D for technologically-advanced vehicles. Local vehicle manufacturers are transitioning to manufacturing EVs. Price-sensitive consumers affecting new car sales. Shift toward electric and new energy vehicles. Sustainability and environmental concerns driving shift to sustainable practices.