Compared with March, when 33,546 units were sold, new vehicle sales were down 98.3 percent in April, according to data released by the National Association of Automobile Manufacturers of South Africa (NAAMSA) on Monday.

“The 98.4 percent (year-on-year) drop in new vehicle sales is a true reflection of the South Africa economy at the back of a 35-day hard lockdown where economic activity was not possible because the country prudently elected to support the imperative to contain the Covid-19 virus and save lives," NAAMSA chief executive Michael Mabasa said in a statement.

New vehicle exports in April were down 97.3 percent at 901 units compared with the same month last year.

NAAMSA said vehicle and automotive component production, the bedrock of the country’s manufacturing sector, would gradually ease back into production as vehicle output resumed under strict risk-adjusted measures as well as hygiene and physical distancing requirements after the government relaxed the lockdown rules from May 1.

"The industry is under no illusion that this is going to be a very difficult year ahead," the association said, adding however that a recent reduction in interest rates by 100 basis points, in addition to another one percentage point cut a few weeks previously, would not only assist indebted consumers and businesses in the short term, but also help restart sales once the country resumed business.

"The reduction in fuel prices will also contribute while the oil price remains low," NAAMSA added.

While the South African government’s risk-adjusted and phased approach to unlocking economic activity after the lockdown was broadly supported, the motor industry needed to start operations "sooner rather than later", said WesBank, a leading provider of motor vehicle and business finance in South Africa.

"The industry’s significant 6.9 percent contribution to GDP (gross domestic product) means that many jobs are potentially impacted, across manufacturing and retail, as is foreign currency revenue from exports," said Lebogang Gaoaketse, head of marketing and communication at WesBank.

"Mobility plays a vital role in providing the necessary stimulus to all sectors of the economy to literally get moving.”

African News Agency (ANA)