Despite operating in a turbulent economy brought on by political fighting circumstance, the South African motor industry is doing surprisingly well.
This was the opinion of economics commentator Dr Azar Jammine, Director and Chief Economist at Econometrix. Speaking at a recent launch breakfast for Automechanika Johannesburg, Jammine explained that while the decline in recent new vehicle sales have had repercussion for the affected retailers, there had been the provision for an increase in the after-sales market, with consumers looking to keep and maintain their current vehicles resulting in increased service and maintenance. This assertion is assisted by other economic factors, such as decreased fuel prices, a lower-than-expected inflation rate, and a rise in the demand for electricity.
Jammine also noted that while the country was suffering an economic downturn, South Africa remains the largest vehicle market in Africa, with new car sales amounting to 37% of the continent share. He also noted that unemployment, low education levels remained challenges to the industry, as well as rating downgrades.