According to well-known news website IOL, South Africa’s biggest trading partner in car exports could be significantly impacted by BREXIT. Britain’s exit from the EU means that every country in the EU would suffer a 1% decline in their GDP growth. As a result of this, we might see an effect in the demand for motor vehicles, however, this is not predicted to have any long term effects.
According to the report in 2016 South African Automotive Manual, Europe accounted for R67.1 Billion / 44.3% of total automotive exports of the R151.5 Billion and R78.9 Billion / 54% of the R146.2 Billion total vehicle and automotive components of the last year.
In terms of volume the EU also accounted for more than half the country’s vehicle exports and as a result, the changes that have come about because of Brexit could have a measurable impact on South Africa’s automotive industry’s overall performance, according to the report.
The impact on the South African automotive industry will be direct and measurable in the short-term but economists believe that the impact will be short-lived as Brexit is still to be negotiated over the period of the next two years. According to other reports, it is assumed that South Africa would need to sign separate agreements with the UK in order to secure any future trade but these reports are just speculation.
There is more information regarding these reports which can be found here:
The news of Brexit comes shortly after the announcement by NAAMSA that reported in April that, whilst sales of new vehicles declined in South Africa, the export of vehicles from South Africa had increased over the last year.