Automotive sector struggles with declining production and sales

THE National Association of Automotive Component and Allied Manufacturers (NAACAM) has voiced serious concerns regarding the automotive sector's negative performance, highlighted in the recent manufacturing production and sales report released by Statistics SA for May.

- YOGASHEN PILLAY

Although the broader manufacturing landscape showed a modest increase of 0.5% compared to May 2024, the automotive segment—specifically motor vehicles, parts and accessories, and other transport equipment—recorded a stark contraction of 6.7%, contributing negatively to the overall figures with a loss of 0.6 percentage points.

Stats SA indicated that this decline in the automotive sector reflects more than just temporary fluctuations, as it is compounded by a mixture of enduring challenges that have plagued the industry.

Renai Moothilal, CEO of NAACAM, said that the decline in production within the automotive sector during May was attributed to a combination of factors.

"These include disruptions in export demand, particularly from key trading partners such as the United States, where recent tariff measures have begun to weigh on order volumes," Moothilal said on Friday.

"Persistent challenges related to logistics inefficiencies, global demand and input cost pressures also continue to affect output levels."