Harsher lockdown could put more pressure on South Africa’s car industry

Many industries are struggling as a result of the COVID-19 lockdowns. One of the most significant hit is the automobile industry.

There are multiple factors that are affecting this industry as a result of the pandemic, which all act as knock-on effects for each other.

The industry is now warning that harsher lockdown restrictions would crush the small gains made and kept over the toughest year in automotive history in the country.

People are inside more, using their cars less, and therefore not needing to get repairs or upgrade their cars like they might have this year. The lockdown has meant many people have less income, meaning spending money on luxuries like new cars has been put on hold.

Shipments from Africa’s largest auto-making country fell to 271 819 units last year from a record 387 092 units in 2019, data from the National Association of Automobile Manufacturers of South Africa (Naamsa) showed, according to Moneyweb.

“Tough months are still ahead before business and consumer confidence will be rebuilt,” Naamsa said. “Prospects for faster growth over the medium term are likely to be constrained by new Covid-19 waves accompanied by stricter lockdown measures, needed fiscal tightening and persistent power-supply disruptions.”

The number of new cars sold in 2020 has also declined by 29.1%. This is a significant problem as the industry is a major exporter for the country and employs a large number of people across the sector.

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