Automotive industry

The impact of the COVID-19 crisis on the global automotive industry is extensive. In its wake, the industry is absorbing manufacturing, supply chain and operational disruptions.

While there is no obvious 'new normal', the industry has become better at responding to the environment and the COVID-19 related challenges as, more than a year into the pandemic, it is clear that the industry's future has altered.

The damage COVID-19 inflicted on the global economy continues to affect emerging markets disproportionately. Their recovery paths are likely to prove uneven and varied across industries and countries. Vaccine rollout programmes in some nations have been faltering, mainly as a result of inequity in global vaccine availability. This will delay economic recovery as much as it defers health security for all.

South Africa

The South African automotive industry provides mobility and facilitates local and export trade; creating sustainable jobs; moving people and goods and supplying services; and serving the people of South Africa.

With an annual contribution of around 6,4% of South Africa's gross domestic product (GDP)1 (including 2,4% from the retail segment) and accounting for more than 13,9% of total export value, the automotive industry plays an indispensable role in contributing to the country's longer-term economic sustainability.

The South African economy remains subdued, with existing political and economic challenges further exacerbated by the slow rollout of the COVID-19 vaccine programme. Continuing low growth, reduced disposable income, depressed consumer confidence, high unemployment, and high social vulnerabilities have been countered by some improvement in the overall economic environment including low interest rates and low inflation. While the true cost of the socio-political unrest in July 2021 remains uncertain, the South African economy will be more constrained as recent economic growth reverses.

Despite COVID-19's negative impact, South Africa's automotive industry produced 62,1%1 of Africa's vehicle production in 2020. This achievement reinforces the role of the automotive industry in South Africa as well as its contribution to the industrial capacity of the African continent.

The South African new vehicle market continues to be affected by the weak macroeconomic environment, lack of disposable income and low consumer confidence. Industry margins will continue to underperform as consumers continue to delay purchases, trade down with the shift to cheaper vehicle models, and place pressure on the quality of pre-owned vehicle supply. Ongoing international and local travel restrictions significantly impact the vehicle rental market and the source of pre-owned vehicles in the market.

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According to naamsa, the South African new vehicle market remains subdued although with more stability as market recovery continues to gain momentum, with new vehicles retailed up 1% for the 12 months to 30 June 20211, to 445 319 vehicles. Our market share of the retail vehicle categories in which we operate stayed consistent at 20,2%.

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United Kingdom

The UK economic outlook is promising, benefitting from the finalisation of Brexit, the lifting of lockdown restrictions, and an extensive vaccination programme2. The new vehicle market improved by 14,6%3 for the 12 months to 30 June 2021, with the passenger market improving by 11,3%3, the LCVs market improving by 33,9%3, and the heavy commercial vehicles improving by 13,7%3. Motus was well positioned and maintained its retail market share. The UK automotive market is showing signs of recovering in both the passenger and commercial segments, although inventory supply constraints are expected to continue in the short term.


The Australian automotive industry remains a highly competitive environment. The market grew by 9,7%4 for the 12 months to 30 June 2021, with Motus maintaining its retail market share. Despite the COVID-19 crisis, the Australian economy has recovered well with the automotive industry benefitting from consumers purchasing vehicles instead of travelling internationally and using government assistance. The slow rollout of vaccinations has resulted in complete shutdowns in Australia, commencing in August 2021.

1 naamsa.
2 KPMG UK economic outlook, June 2021.
3 The Society of Motor Manufacturers and Traders.
4 Federal Chamber of Automotive Industries – Australia.
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Global and local sector trends

The automotive industry remains highly competitive with technological advances and increasingly empowered consumers making it imperative that we adapt our operating models to remain relevant to the needs of the digitised consumer.

Key trends shaping the automotive industry include:


Consumers are demanding technology that is smarter, simpler and in line with their needs. The automotive industry must transform the customer experience to one that is digital, omnipresent and omni-channel, and reflects the customer experiences enjoyed in retail, banking, and a host of other industries. Innovation is accelerating across the customer experience, including the marketing, valuation, and trading of pre-owned vehicles, and increasing the ease and security of transacting online.

The 2021 Deloitte Global Automotive consumer study found that even though virtual vehicle sales may be here to stay, a majority of consumers would still prefer to acquire their next vehicle in person at an authorised dealer, as some aspects of the buying process remain difficult to digitise.


Interest in electric and hybrid vehicles is growing as stricter emission regulations, lower battery costs, and more widely available charging infrastructure create momentum in their development by OEMs and adoption by consumers.

Vehicle manufacturers are working on electric and hybrid vehicle concepts in their product portfolios to meet stringent emissions targets, particularly in the UK, Europe, and China. The impetus to accelerate electric and hybrid vehicle adoption in South Africa comes from the South African Automotive Masterplan (2021 to 2035) implemented on 1 July 2021 through government policy to stimulate and protect the local automotive manufacturing base for export.

In May 2021, the South African Government issued a draft New Energy Vehicle Green Paper. The paper is the first step towards establishing a clear policy foundation to co-ordinate a long-term strategy to enhance South Africa's competitiveness in the global transition from the internal combustion engine into electromobility solutions and technologies.

Structural realignment

In South Africa, the trend towards buying down has resulted in significant volume reductions in the luxury vehicle segment and reflects a permanent structural realignment of the new vehicle market. Entry-level vehicles, small hatchback vehicles and, small to medium SUVs continue to grow as consumers trade down due to affordability. In addition, the pre-owned vehicle market is buoyant. This has been accelerated as a result of the impact of the COVID-19 crisis on the South African economy.


On 1 July 2021, the key legislation directly impacting the South African automotive industry came into effect. Our memberships in industry bodies have been critical in developing our deep understanding of what we need to change to comply with the regulations and the impacts they will have on the Group and our industry. These include the Competition Commission's Automotive Aftermarket Guidelines (also known as Right to Repair), the POPIA, and the AARTO Act. Certain provisions of the AARTO Act, for example, the points demerit system and driver rehabilitation programmes, will only be introduced from 1 July 2022 – a year later than anticipated.

Read more about the impact of new and emerging regulations on our business in our ESG report online.

Management responses to the changing environment

Motus is well-positioned for longer-term resilience and growth in the markets in which it operates.

Our immediate responses include:

  • Adapting our business to the new market conditions.
  • Implementing additional health and safety protocols for customers and staff.
  • Scaling our business activities accordingly and responsibly, introducing multi-franchise dealership models where appropriate.
  • Maintaining good relationships with OEMs, suppliers, and customers.
  • Controlling capital expenditure.
  • Accelerating innovation and digitisation strategies to address consumer needs, for example launching our platform, and focused investment in innovative technologies, for example, getWorth.
  • Maintaining open and transparent communication with funders and investors, the board, and our people.
  • Adapting and transforming the workplace, including enhancing staff wellness programmes and introducing flexible working arrangements.
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