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The SA Daily 04 August 2020

Automotive sector in reverse

  • The automotive sector, one of many knocked by the pandemic, is estimated to contribute 6.4% to SA GDP, comprised of the manufacturing segment’s 4.0% and the retail segment’s 2.4% of GDP.
  • NAAMSA data yesterday confirmed severe weakness in total new vehicle sales as having been sustained in July, as total new vehicle sales contracted by 29.6% y/y, after contracting by 30.7% y/y in June. Momentum moderated, as the month-on-month increase slowed, with monthly total new vehicles of 32,396 only 754 units more than June’s 31,642.
  • The car rental industry in July represented just 1.4% of total new passenger car sales, compared to 20% in July 2019, as tourism is still being hamstrung by global travel restrictions. 
  • Seasonally adjusted total new vehicle sales, aligning with the official calculation of GDP, contracted by 97.5% q/q (saar) in 2Q20, after contracting by 45.4% q/q in 1Q20.
  • The automotive sector therefore likely materially detracted from GDP in 2Q20, in line with our forecast of the deepest GDP contraction in 2Q20.

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