What are the numbers telling us?
William Kelly
EV advocate. Buzzhead (my invention). Still a petrolhead. Connect. I don't mind disagreement-it forces thinking. I know aquaculture & am a consultant in CSI project management. Journalist in matters motoring.
Is it (car)nage?
NAAMSAs figures are presented coherently and to the point. There is an art in good presentation of statistics, damned lies and statistics and September's figures for sales are located here.
Take a quick look at the figures below.
And then at the summary with my highlights added
It's the exports column that is worrying. A monthly variation can be explained by once off events in the industry - remember when Toyota had their entire factory wiped out by the mud in KZN? They were down for a few months (their recovery is still the industrial story of the century) and so the figures would reflect that.
But this is an industry that deals in long time frames. It is the nature of the beast - you plonk down several billion rand into a factory and that factory takes some time to make extraordinarily complex, sophisticated and expensive products that are then sold to pay off the factory over quite a few years. The quantum of cash engaged in operating these factories is also enormous and so variances in monthly production have to be considered over a longer time frame than say, a fast moving consumer goods business.
That's the upside of resilience through sheer size. The downside in the figures is that post Covid we should be seeing a better recovery in overall sales than we have but I will temper that with the fact that the GNU and revived SA enthusiasm will only have its impact reflected as a lagging indicator in auto sales in upcoming months.
That is of course only the local impact. The worrying thing here as I have highlighted is the export market. What is going on there?
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What this might be telling us might tie into what Andrew Kirby was saying at a recent event covered by Roy Cokayne colleagues in which he referred to the first signs of the SA auto industry de-industrialising.
This is terrifying. These are Titanic businesses that take years to turn the ship and to reverse trends. They cannot make changes rapidly - in nautical terms when they set sail on their business journey the destination is plotted before the ship is built and sets sail. You can change the destination only with great difficulty and in doing so may find yourself in uncharted waters.
It also reaffirms the importance of the local market to the OEMs. Whilst exports are down sharply, the local market is not down as many units. In other words we might expect that some vehicles destined for export ended up being sold into the local market.
It is important to understand this clearly. You cannot expect OEMs locally to start to build NEVs (New Energy Vehicles) if there is not a buffer of strong local demand. You will not get strong local demand when you have an insanely high import tariff on them.
These are sales in the UK that I picked up from a post by Nick Brooks and it is here.
Note that *EV sales total 43.6% of the market. This is on the back of quite a few years of hard work from both government and industry on that side of the pond and it's an indication of what we need to be doing here and doing so urgently.
The good news is that Mr Minister of "Handbrake Kick The Can Down The Road And Do Nothing" Patel is gone. The bad news is that as Kirby has pointed out, the first tangible effects of government's head in the sand stupidity are being felt and that to head these ripples off at the hills before it becomes a tsunami requires work to be done that should have been done a decade ago.
It can be done. This South Africa after all and we have CEOs in our OEMs that are truly world class. Just take a look at what's already been done. It is an incredible success story.
We need to get going now, with the requisite urgency commensurate with the realisation that the good ship SA OEM has taken a hit below the water line.
All hands on deck.