Auto Insights Newsletter | August 2021
Is the market improving? Have your say
Is the mood shifting in the automotive sector? Are confidence levels rising or have the recent unrest and lockdown levels dampened enthusiasm for the rest of the year? Make sure your views are included in our current Auto Sector Confidence Indicator.
In May, 37% of respondents believed that business would take more than a year to recover (an improvement on 44% in February) but the percentage who believed business would take more than two years to recover increased from 17% in February to 21% in May. Either way, more than 50% in the industry see recovery taking a year or more – do you still think so?
Time needed by business to recover from the impact of COVID-19, by segment for May 2021
Market expectations were reasonably consistent as the graph below shows, but with OEMs more optimistic than Dealers or MBRs
Current and expected levels of market activity by segment
And what of the issues the industry faces? In May, respondents felt markets were too quiet and that a shortage of stock, both vehicles and parts, was problematic, as was the reduction in the approval of vehicle financing applications.
Positive factors:
- 7.2% hoped that Covid-19’s impact on business would lessen as lockdown levels were reduced, there would not be a third wave and that SA would have a successful vaccination programme
- 6%were confident that the economic situation would improve sufficiently
- 5.2% believed interest rates would boost vehicle sales
Negative factors:
- 35.1% anticipated a third wave of Covid-19 infections would be the biggest barrier to recovery
- 19.4% were worried that the shortage of vehicle stock and parts would further hamper opportunities to trade
- 13.6% said the economic situation was a negative impact on the future
The third Covid-19 wave did materialise, accompanied by more stringent lockdown rules, and the vaccination programme was slow to get off the ground but has since gathered momentum – but perhaps not enough to prevent a fourth wave towards the end of the year. President Cyril Ramaphosa also made changes to his cabinet in the wake of the unrest, but will they be enough to rebuild confidence?
How do you see the future?
Click here to have your say
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