A significant 66.9% of domestic light vehicle production was exported in 2022, as revealed in the second-quarter Business Review by the Automotive Business Council.
The domestic car manufacturing industry continues to capitalise on the various trade arrangements enjoyed by South Africa with major markets such as Europe, the UK, and the US, which enhance exports.
Europe maintained its dominance as a region, accounting for 72.7% or nearly three out of every four vehicles exported in 2022.
However, increasingly strict emission regulations overshadow the future of South Africa’s vehicle exports to Europe.
Therefore, domestic vehicle production needs to align with the overall technology shift of global value chains in which local manufacturers operate to safeguard their share.
In the second quarter of 2023, domestic vehicle production increased by 23.0% compared to the corresponding quarter of 2022. Light commercial vehicle production was also supported by recent introductions of new locally manufactured models.
In the heavy commercial vehicle sector, the performance reflected a higher reliance on road transport in certain segments.
This is due to rail transport inefficiencies, while in other segments, a challenging business environment also played a role.
Vehicle exports remain crucial for domestic manufacturers to generate economies of scale and improve international competitiveness.
Vehicles manufactured in South Africa are primarily destined for the export market to attain higher production volumes.
This strategy also helps generate rebate credits against duties for vehicle imports.