The National Automobile Dealers’ Association (Nada) has lauded the South African automotive sector for being resilient amid global disruptions. The entire industry has shown an incredible ability to overcome setbacks and delays caused by supply chain disruptions and inefficiencies caused by the Covid-19 pandemic.

Nada chairperson, Mark Domisse, has applauded the recent publication of sales statistics for new and used vehicles in South Africa. These year-on-year figures show an improvement from 2021, despite the far-reaching consequences of the recent KwaZulu-Natal floods and the ongoing global shortage of semiconductor chips.

Formex Industries is a leading supplier and manufacturer of automotive components, welded assemblies and tubular products. These components are sold to original equipment manufacturers (OEMs) and Tier 1 suppliers that distribute to international automotive brands. The South African automotive sector is resilient, which not only benefits local production facilities but also international ones that purchase components from South African manufacturers.

Causes of the disruptions

Both the manufacturing sector and the trading environment continue to experience significant disruptions. Despite being less of a factor, Covid-19 still contributes to these delays as factories across the globe are shut down intermittently. This has led to the shortage of semiconductors and other vital components for vehicles.

The Russia-Ukraine war has also caused issues with component supply from Europe. Certain automotive parts manufactured in the region are facing transportation delays and shortages of raw materials, such as palladium from Russia. This precious metal is a core material used in catalytic converters.

Closer to home, natural disasters and ongoing protests have caused their own disruptions. The recent spate of floods in KwaZulu-Natal has severely affected automotive manufacturers and retailers in the province. Protests over rising fuel prices have also affected major transport routes in South Africa, causing delays in the supply chain.

Resilient sector for the future

Despite these various factors, the local automotive industry is forging ahead. Recent export sales have increased by 16% from the same period in 2021. This is a positive sign as Durban has faced severe disruptions at its seaport and several of its road transport routes. This resilient characteristic is hopefully a good sign for the future of the local industry and economy.

Around 88% of new vehicle sales in South Africa are done through official dealerships, whereas the rental market contributes to around 9% of these sales. According to Domisse and Nada, these statistics are proof that the South African vehicles market is thriving, even during tough times.

This is a positive sign for Formex and other components manufacturers. We play a key role in the overall sector. The continued high performance of the industry is a positive sign of growth and recovery. For more information about our automotive components and products, please contact us today. 

Formex Industries is a metal forming and assembly company that supplies a variety of complex products to the local automotive industry and the export market. The company is based in the Nelson Mandela Bay metropole, South Africa’s foremost region for automotive manufacturing and export.

Formex is a supplier with 69% black ownership, of which 37% are black women. The company is owned by Deneb Investments Limited – a subsidiary of Hosken Consolidated Investments Limited (HCI) – one of South Africa’s biggest true B-BBEE companies listed on the Johannesburg Stock Exchange (JSE).

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