South African vehicle exports declined by a worrying 38% but should recover soon

While South Africa’s domestic new vehicle market is struggling to gain traction, with the market slipping by 4.1% year-on-year in September, our export numbers paint a far grimmer picture.

According to Naamsa - The Automotive Business Council - South African vehicle exports declined by 38.1% in September, versus the same month in 2023. This follows respective declines of 34% and 33% in July and August, while year-to-date exports are down by 19.7%.

Naamsa attributes the recent drop in export sales to waning demand for models nearing the end of their production cycles, compounded by stricter emissions laws in key global markets such as Europe.

BMW South Africa recently ended production of the third-generation X3 as it gears up to produce the new-generation model for export. Just one X3 was exported last month, whereas it usually averages about 6,000 per month.

Volkswagen Polo exports are also down, from an average of 8,000 units per month in the first quarter of 2024, to an average of around 3,000 units in the past quarter.

This is not due to any model upgrades and while Volkswagen South Africa has not stated a reason for the export decline, indications are that this too is a temporary situation. VW’s Pamplona plant in Spain recently discontinued the Polo, making South Africa the sole producer of the compact hatchback for export markets. Could it be that European markets are currently scooping up the run-out production from Spain?

Either way, current indications are that South Africa’s current export deficit is likely a temporary situation, albeit in the longer term manufacturers will need to adapt their production to more eco-friendly models in order to comply with the requirements of major export markets such as Europe.

A promising sign, however, is that year-to-date exports to the US have increased by 132%, according to Naamsa. Holding on to AGOA is surely a non-negotiable?

For the record, South Africa’s top vehicle exports in September were the Silverton-produced Ford Ranger (8,603), Mercedes C-Class (7,700), Volkswagen Polo (2,449), Toyota Hilux (1,856) and Nissan Navara (434).

IOL

• South Africa has five car export heroes, but will the industry survive the EV era?

• These were the 50 best-selling vehicles in South Africa in September 2024

• Illegal grey imports pose a growing threat to SA’s motor industry - here’s how to spot one