The South African motor industry is a cornerstone of the economy, contributing far beyond vehicle manufacturing. While billion-dollar investments in car plants grab headlines, the dealer network plays a vital role in job creation and economic growth.
With over 1 600 franchised dealerships representing 55 brands, this sector contributes significantly to the nation’s gross domestic product (GDP). These dealerships are all members of the National Automobile Dealers’ Association (Nada). These do not account for independent dealerships serving an estimated 12 million older vehicle car park.
Dealerships are economic powerhouses. They generate substantial revenue through new and used car sales, workshops, parts and financial services. This economic activity supports countless jobs, from sales staff to technicians and boosts local economies. It is estimated that the multiplier across the entire value chain is between 500 000 and 1 000 000 people.
According to NADA, the overall contribution of the motor industry to GDP runs at just under 5%. Retail accounts for approximately 2.1% of GDP, making the dealer economy a significant contributor to national success.
Moreover, the motor industry has a wide-reaching impact:
• Tax contributions: Dealerships contribute billions in VAT and local taxes.
• Infrastructure investment: Showrooms and facilities require substantial investments.
• Skills development: Dealerships invest in employee training and development.
• Supply chain support: The industry supports a vast network of suppliers and service providers.
With its significant contribution to GDP, job creation and economic activity, the South African motor industry is a driving force for the nation’s prosperity.
Source: MotorPress
