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The 2021 AutoTrader Car Industry Report reveals that electric vehicles (EVs) and BMWs have soared in popularity.

The report, covering the period from January to December, shows that searches for EVs surged by 110%, to half-a-million last year, while BMW received eight-million more consumer advert views in 2021.

The report also shows that average car prices were still, on average, more expensive than the previous year, but lower than the price seen in the first half of 2021, indicating a slow return to stabilisation as a result of macroeconomic impacts to the market, notes the report.

On average, the price of vehicles in 2021 was R374 149, with an average mileage of 75 413 km.

In 2021, more than 1.3-million unique listings were loaded on AutoTrader, with August accounting for the largest stock count in the year.

Year-on-year there was a 0.8% decrease in available stock.

“Following a challenging 2020, which saw the automotive market grinding to a virtual halt, 2021 was a year that forced us to evolve and find products and services that met the change car shoppers were experiencing,” says AutoTrader CEO George Mienie.

“[This year] is, therefore, a year to switch on new ways of thinking and operating within the local automotive landscape.

“It was a year, however, that didn’t only see new ways of thinking; it also saw increased activity in the marketplace,” notes Mienie.

“In 2021, more than 637-million total searches were conducted on AutoTrader, a record high, representing a growth of 28% year-on-year.

“This translates into over 20 consumer searches per second.”

While the 2021 AutoTrader Car Industry Report shows that consumers are researching more brands than ever before, they continue to be brand loyal.

The five most searched for brands – BMW, Volkswagen, Mercedes-Benz, Toyota and Audi – remained the same in 2021, changing only in rank.

BMW was once again the brand with the most consumer advert views. However, the popularity of the brand soared last year. It received 43.9-million views – just under 8-million more than the same period a year ago.

“Consumer advert views remain one of the key leading performance indicators for car dealers, as they are definitive precursors to an actual enquiry (lead) on the car,” says Mienie.

“But the process has to be fast; international studies focusing on the automotive digital retail market have revealed that car sellers have roughly 15 seconds to grab the attention of a car buyer on a consumer advert view.”

Another important change compared with 2020 can be seen when examining the most viewed variants.

The Volkswagen Golf GTI has historically been the most viewed variant and remains the top searched variant in 2021 with more than 3.2-million searches.

But, early in 2021, and for a short period, this changed to the Toyota Hilux 2.8GD-6, and the GTI ranked second.

The most searched for model last year (4.3% of all searches), was the Toyota Hilux, accounting for 22.8-million searches.

Yet another important variation in 2021 versus 2020 was the increased number of searches for EVs.

In total, more than 540 000 EV searches were conducted in 2021, indicating an increase of over 110% year-on-year.

As more EVs were introduced into the market, AutoTrader saw searches for the Porsche Taycan increased by over 900% last year, for example, while Jaguar I-Pace searches rose by 62%.

President Cyril Ramaphosa has appointed former South African Reserve Bank (SARB) deputy governor Daniel Mminele to head a newly established Presidential Climate Finance Task Team, which will lead South Africa’s efforts to mobilise concessional climate finance for its just energy transition.

The appointment follows an $8.5-billion offer made at COP26 by France, Germany, the UK and the US, as well as the European Union, to support South Africa’s just transition to a low-carbon economy, with a specific focus on the electricity, electric vehicle and green hydrogen sectors.

The Presidency indicated on Tuesday that it expected Mminele to oversee a just transition that advanced the country’s interests, protected vulnerable workers and communities and contributed to investment, growth and sustainable job creation, while supporting the global fight against climate change.

The Political Declaration unveiled on November 2 indicated that the funding, which could take the form of both grants and concessional loans, could be mobilised over the coming three to five years to support the implementation of South Africa’s Nationally Determined Contribution (NDC).

South Africa made a progressive revision to its NDC ahead of COP26, with a new 2030 range of 420- to 350-million tons of carbon dioxide equivalent (Mt CO2-eq), representing a marked improvement on its 2015 pledge of 614 Mt CO2-eq to 398 Mt CO2-eq.

The Presidency said the Presidential Climate Finance Task Team would, together with the Asset and Liability Division of the National Treasury, analyse the offer made with a view to advising Cabinet on its composition, affordability and alignment with the country’s regulatory environment.

It would also engage with partner countries, coordinate relevant government departments, development finance institutions and the private sector, while overseeing the development of financing mechanisms and facilities to enable the flow of international climate finance to support South African just-transition projects.

Eskom CEO Andre de Ruyter has indicated that the lion’s share of the finance should be directed the way of Eskom and the electricity sector and has indicated that the State-owned utility has several ‘shovel-ready projects’ across its generation, transmission and distribution businesses.

In a recent interview, De Ruyter told Engineering News that urgency was required to convert the offer into transactions, as several other countries were also keen to access the climate financing on offer for their own transitions.

Mminele, who has since January 2022 been an independent nonexecutive director and chair-designate at Alexander Forbes Group Holdings, served as CEO of Absa Group until April 30, 2021.

Prior to joining Absa in January 2020, he was a deputy governor of the SARB, where he served two five-year terms from 2009.

“During a career spanning nearly 20 years at the South African Reserve Bank, Mr Mminele represented the SARB and South Africa in many international fora on the African continent and beyond.

“His experience before the SARB included credit-risk analysis, corporate banking, and project and structured finance at private banking institutions in Germany, the UK and South Africa,” The Presidency said in a statement.

Mminele was also the recipient of the 2019 Life Time Achiever Award of the Association of Black Securities and Investment Professionals.

Eskom CEO Andre de Ruyter reports that action will be taken against management at some power stations after an unexpectedly sharp deterioration in the performance of certain coal-fired generators on Monday, which precipitated the re-introduction of load-shedding only 24 hours after rotational cuts were initially suspended.

Load-shedding was re-instated at 21:00 on Monday February 7 after full and partial unplanned breakdowns surged to nearly 16 000 MW at a time when more than 3 300 MW was down for planned outages.

De Ruyter refused to be drawn immediately on the details of the “consequence management” envisaged, or even which stations were to be affected, saying only that an announcement would be made once the individuals concerned had been notified.

He was “not satisfied”, however, with the performance of certain power station executives and reported that he had issued an instruction for “sanctions to be implemented” against the individuals concerned.

Particular frustration was expressed over the precipitous decline in performance during the course of Monday, despite some power station managers having provided an upbeat assessment of the recovery at a system briefing at 5:00 on Monday morning.

De Ruyter argued that “performance is managed by leadership” and that a lack of “visible, felt leadership” was largely to blame for the regression experienced across several power stations on Monday.

“That’s why we have power station general managers,” he said without disguising his irritation, adding that accountability had to be taken at the right place in the organisation.

“We are not going to tolerate poor performance and we will take action.”

Following a strong recovery on Friday, which enabled Eskom to reduce the intensity of load-shedding over the weekend, there was a steep deterioration with units lost at Camden, Kusile, Duvha and Matla power stations.

At a briefing held at 17:00 on Monday afternoon, it was confirmed that Duvha was not generating any electricity whatsoever.

COO Jan Oberholzer indicated that the situation would have been even more precarious had it not been for a high-level intervention at Majuba on Sunday, when it was discovered that no coal was being moved to the bunkers.

The position was exacerbated by the failure of Transnet to honour its two-train coal delivery schedule to Majuba on February 6.

Generation group executive Phillip Dukashe described the performance of certain power station managers and employees as “disappointing” and reiterated that Eskom was experiencing a skills deficit in certain areas.

Dukashe said that strenuous efforts were being made to intensify training and development and reported that recruitments were also being made from within and outside of Eskom to augment its skills at certain power stations.

Oberholzer acknowledged that some of the recent problems could be attributed to a lack of experience and the fact that “battle scarred” individuals, who would have previously been on hand to offer coaching and mentorship, had departed the organisation.

De Ruyter acknowledged offers made by retired Eskom employees to assist but said that it was more complicated than it appeared to take up such offers, as it blurred lines of accountability.

“The notion of bringing in retirees – and we want to thank them for their patriotism for offering to serve without compensation – creates a whole range of different problems in terms of reliability, in terms of accountability and in terms of being subject themselves to discipline as it may be required.”

WHAT ABOUT SONA?

De Ruyter also did not guarantee that load-shedding would be fully suspended in time for Thursday’s State of the Nation Address by President Cyril Ramaphosa, which would take place at the Cape Town City Hall as a result of recent fire damage to Parliament.

However, he gave an assurance that Eskom, together with the City of Cape Town, would ensure that the event would not be affected by power cuts.

“We will ensure, with the City of Cape...

In 2012, about 130 000 electric cars were sold worldwide. Today, that same amount is moved in the space of a single week, says a new International Energy Agency (IEA) report, authored by Clean Energy Technologies analyst Leonardo Paoli and Energy Technology Policy Division head Timur Gül.

In this report, electric vehicles (EVs) refer to electric light-duty vehicles, which include passenger cars and light commercial vehicles. It also includes battery electric and plug-in hybrid vehicles.

The report notes that EV sales have “been particularly impressive” over the last three years, even as the global pandemic shrank the market for conventional cars, and as manufacturers started grappling with supply-chain bottlenecks.

In 2019, 2.2-million EVs were sold, representing 2.5% of global car sales.

In 2020, the overall car market contracted, but EV sales bucked the trend, rising to 3-million and representing 4.1% of total car sales.

In 2021, EV sales more than doubled to 6.6-million, representing close to 9% of the global car market, and more than tripling their market share from two years earlier.

More importantly, all the net growth in global car sales in 2021 came from EVs, states the IEA report.

“We estimate there are now around 16-million electric cars on the road worldwide, consuming roughly 30 terawatt-hours of electricity per year, the equivalent of all the electricity generated in Ireland.”

China Leads

China led global growth in EV markets in 2021 as sales nearly tripled to 3.4-million units. In other words, more EVs were sold in 2021 in China alone, than were sold in the entire world in 2020.

This yearly increase is the fastest EV market growth in China since 2015, significantly outpacing the more gradual recovery of the country’s overall car market.

EVs’ share of the overall market on a monthly basis leaped from 7.2% in January, to around 20% in December.

The Chinese government’s official target is for EVs to reach a market share of 20% in 2025, and their performance in 2021 suggests they are well on track to do so, says the IEA.

“The government extended EV subsidies for a further two years after the pandemic broke out, albeit with a planned reduction of 10% in 2021, and 30% in 2022.

“The growth in 2021 sales, despite the scaled-back subsidies, suggests China’s EV market may be starting to mature.

“But, it could also reflect customers rushing to secure subsidies at 2021 levels before they declined at the start of 2022.”

Another important factor was the expanded range of small-car offerings, notes the IEA report.

“The tiny Wuling Hongguang Mini EV is not eligible for subsidies, but was still among the bestselling models in China last year, with just under 400 000 units sold,

offering an affordable entry point to the market for new customers.”

Europe and SA

In Europe, EV sales increased by nearly 70% in 2021, to 2.3-million, with about half these plug-in hybrids.

This is significant to South African vehicle manufacturers, as Europe is the country’s main new-vehicle export market.

The surge in EV sales in Europe last year was partially driven by new carbon dioxide (CO2) emissions standards.

Purchase subsidies for EVs were also increased and expanded in most major European markets.

Monthly sales in 2021 were the highest in the last quarter of the year, peaking in December when European sales of EVs surpassed diesel vehicles for the first time, with a 21% market share.

In absolute terms, the largest EV market in Europe in 2021 was Germany, where more than one in three new cars sold in November and December was electric.

Overall, electric cars accounted for 17% of total European sales in 2021, but there were significant differences across markets.

Norway at 72%, and Sweden and the Netherlands at 45% and 30% respectively, sat atop global rankings.

At 25%, Germany had by far the highest market share among large European markets, followed by the UK and France (both around 15%), Italy (8.8%) and Spain (6.5%).

The US made an impressi...

The new-vehicle market could grow by between 8% and 10% this year, reaching a level of 500 000 units, says Standard Bank South Africa (SBSA) automotive retail finance head Cyril Zhungu.

“After a series of unprecedented events over the past two years owing to the Covid-19 pandemic, the automotive industry has, to a large extent, remained resilient as growth surpassed expectations in 2021 to reach 22% over 2020.

“A combination of back-orders, normal replacement patterns, pure organic growth and recovery of the hospitality industry added to a mixed bag of positive outcomes, for the market to end with 464 122 new-vehicle sales in 2021.”

Zhungu adds, however, that it should be noted that the decline in vehicle sales had bottomed out prior to the onset of the Covid-19, with the already upward trajectory disrupted directly by the pandemic itself, both in local and export sales.

“The very essence of the pandemic resulted in some significant changes to the supply and demand dynamics within the automotive industry globally as export countries recovered at different levels and local business operating models also changed to manage continuity.

“In our attempt to join the dots, it is noted that the local drivers for vehicle demand are somewhat unique, given the nature of the South African market and how the country responded to some of these changes,” says Zhungu.

In the local market the ratio of new to pre-owned vehicle sales from applications processed and units financed by SBSA still reflects a preference for pre-owned vehicles, which may be attributed to price sensitivity to vehicle-price inflation and general level of affordability in the market.

Also, the volume of applications processed for vehicle finance by Standard Bank remained stable – at a high level – indicating strong demand for vehicles.

The average age profile of the South African car parc also remains skewed towards ten years, implying a possible stable and on-going replacement trend going forward.

In addition, the low interest rates following intervention by South African Reserve Bank in 2020 as part of its Covid-19 response, created an opportunity for new demand as customers took advantage of the low interest environment to replace their vehicles.

Demand generation through vehicle model renewal and new-vehicle model introduction also remains a key factor in stimulating new-vehicles sales, as this normally comes with various sales support incentives for customers.

“South Africa vehicle manufacturers, importers and distributors have become very proficient at responding to any changes in consumer demand trends by using tactical supply and support strategies for different market segments to meet affordability, business and lifestyle needs,” says Zhungu.

Recovery of the hospitality industry as Covid restrictions loosened also had a direct impact on the positive revival of the rental industry, whose replacement cycle nudged along sales in 2021.

“There remain residual supply-side back-orders following the component and chip shortages widely reported in 2021, all of which are expected to settle down soon, thus providing a stable vehicles-sales projection for 2022,” adds Zhungu.

However, he notes that there are some downside risks within the South African economy related to increased levels of unemployment following business closures and the rationalisation of operations within SA Inc.

There is also an increase in consumer debt levels as reflected in the change of the country’s debt-to-disposable income ratio from 71.9% in 2018, to 77% in 2020, which, together with a possible upward adjustment to cost of credit as interest rates normalise again by at least 50 basis points in 2022, may affect the projected growth in vehicles sales.

“With all that said, we remain of the view that it is not unrealistic to expect further growth in vehicles sales by at least 8% in 2022, driven by normal organic growth in demand for private and business use, back orders, together with the replaceme...

Electricity utility Eskom insists that it has a pipeline of generation, transmission and distribution projects that it could start implementing immediately should it secure access to “finance, human resources and expedited regulatory approvals”.

During a recent interview, Andre de Ruyter told Engineering News that the lion’s share of the $8.5-billion in climate finance offered to South Africa should, once converted into transactions, be directed to Eskom, largely because the utility’s projects were at a more advanced stage than the alternatives and were “in some instances, shovel-ready and good to go”.

The COP26 offer, which has not been universally embraced within government, despite a Cabinet-level endorsement, is also earmarked for the stimulation of electric vehicle and green hydrogen production in South Africa.

De Ruyter’s shovel-ready assertion has been questioned by some close observers, however, who believe that much project preparation work is still required to firm up the pipeline, including projects linked to Eskom’s Just Energy Transition strategy.

In response to questions posed by Engineering News on these concerns, the utility again argued that funding, rather than project preparation, remained the main obstacle to several small and large developments.

“Examples include completed project development for small photovoltaic plants at existing power stations that already have environmental authorisations,” Eskom said, while noting that the larger projects would require a Section 34 determination.

“We are also ready to fabricate and assemble microgrids at Komati Power Station – again the financing and regulatory approvals pending.

“For our transmission projects, again we require the financing and approvals and the unblocking of access to servitudes.

“In other words, the pre-feasibility work for these projects has been completed, and we now require the financing and approvals for implementation.”

De Ruyter has indicated previously that Eskom aims to find a financial solution to enable it to invest R400-billion over the coming 13 years. This expenditure would be used to partly help close prevailing and future generation supply gaps, as well as to build the grid infrastructure needed to facilitate private investment in generation.

He is on record as stating that Eskom could add about 8 GW of mostly new renewables electricity generation over the period, during which it would be decommissioning some 22 GW of coal. The balance of the generation capacity would have to be added by non-Eskom investors.

In addition, about 8 000 km of transmission lines and new substations will be required to unlock South Africa’s “best solar and wind acreage”, while expenditure is also needed to upgrade the country’s distribution infrastructure to guarantee supply to businesses and households, while enabling embedded generators to inject energy into the network.

“So we would really like to see these transactions being implemented speedily and that we can start getting access to that money in order for us to avoid running into a time crunch like we’ve seen in the past with Eskom, with Medupi and Kusile, where we really started construction far too late and then made a number of mistakes in the process,” De Ruyter said during a recent interview.

Eskom does view life-extension of the existing coal stations to be a feasible option for closing the supply gap, but it will continue to focus on improving the fleet’s poor performance through its reliability maintenance programme.

“[We have] already extended the dead-stop dates for some of these plants.

“However, Eskom will not be able to extend the life of any coal plant, as this is not a viable option in many respects, including economically and environmentally.”

The utility dismissed suggestions of its being anti-coal, arguing that such a narrative was not supported by the facts.

“The reality is Eskom will remain a substantial consumer of coal for a very long time – the two new coal-fired power st...

The number of passenger trips recorded on Cape Town’s MyCiTi bus service for the last quarter of 2021 increased by more than 19% compared with the same period in 2020, when South Africa faced harsh lockdowns owing to the Covid-19 pandemic.

The City of Cape Town reports that a total of 2.84-million passenger trips were recorded on MyCiTi from October 1, 2020, to December 31, 2020, when South Africa was in the midst of the second wave of Covid-19.

This number increased to 3.4-million passenger trips from October 1, 2021, to 31 December last year.

“This is an increase of 549 197 passenger trips, or 19.3%, which confirms that more people are commuting as life in Cape Town gradually returns to normal,” says Transport MMC Rob Quintas.

“In fact, the nearly 3.4-million passenger trips for the last quarter of 2021 are the most trips we have recorded since the start of the Covid-19 pandemic.

“The uptake is wonderful news as we see more people returning to work and school and travelling to popular destinations. It also confirms the popularity of, and demand for, the reliable and affordable MyCiTi bus service.”

The MyCiTi service currently consists of 46 routes in the central business district and surrounds, Milnerton, Table View, Dunoon, Joe Slovo, Century City, Blaauwberg, Melkbos, Atlantis, Salt River, Woodstock, Camps Bay and Hout Bay, and includes 39 stations and 500 bus stops.

Around 134-million passenger trips have been made on the MyCiTi service since its launch in May, 2010, until December, 2021.

“The next big milestone for us is getting the N2 Express buses running,” says Quintas.

“The N2 Company and city officials are hard at work to make this happen. We are confident that the service will resume in February and cannot wait to welcome back the commuters from Mitchells Plain and Khayelitsha.”

The City of Cape Town signed a new operating contract with the N2 Company, equally owned by Lisekhonikamva Rapid Transit Operator from Khayelitsha, Mitchells Plain Integrated Rapid Transit (Route Six from Mitchells Plain), and the Golden Arrow Bus Service on January 20.

Rail operators in the Southern Africa Development Community region need to jointly and urgently ramp up investments into their respective rail infrastructure to enable trains to move quicker and unhindered, both within their countries and between each other, as a measure to improve trade and logistics in the region, Transnet CEO Portia Derby has said.

Speaking during a webinar on Upgrading Infrastructure for Economic Growth, hosted by Creamer Media Contract Publishing on February 4, she said that, for Transnet alone, the investment required to bring South Africa’s rail network back to its design specification was “huge”.

Derby said Transnet needed to re-establish or upgrade its track signalling and substations, among other items. All inclusive, track upgrading came with a price tag of almost R100-billion that needed to be spent over the next seven years.

She noted, however, that cable theft was a significant challenge, not only for Transnet, but also for Eskom, Telkom and municipalities.

In addition, Derby noted that Transnet recently started working with the Passenger Rail Agency of South Africa to deal with the issue of cable theft.

“If we do not deal with that issue, [then] I do not know how big the [proverbial] hole is, because it is constantly growing,” she said.

Meanwhile, Derby noted that, in South Africa, using rail for cargo transportation has fallen to about 3% of total cargo movements in the country. “I image that the same disastrous situation has also arisen in [the rest of the] SADC [region],”

She pointed out, however, that rail gauge was not a big concern, stating that “we have the same gauge up to the Democratic Republic of Congo . . . there are no issues around gauge.

“There may be issues which makes life really complicated, [such as] alternating current and direct current [for electric locomotives] . . . but [running] diesel is not really a problem [in that respect],” she said.

The issue is that every country in the SADC region has, over time, underinvested in rail infrastructure. “So we all have significant speed restrictions, which means that rail is not as efficient as road. So there is a significant amount of work that we all need to do to get the track up to speed so that we can have genuine interoperability,” said Derby.

Also speaking during the panel discussion was moderator Construction Alliance South Africa chairperson John Matthews, as well as Rand Merchant Bank infrastructure finance co-head Judy Kobus, Development Bank of Southern Africa (DBSA) chief economist Zeph Nhleko and DBSA infrastructure finance head Khetha Rantao.

INFRASTRUCTURE FUNDING

In terms of the key instruments the DBSA is deploying to support government strategy to place infrastructure at the centre of reconstructing the economy, Nhleko said the obvious tool was the incubation of the Infrastructure Fund.

Notwithstanding that fund, and over and above the traditional on-balance-sheet project finance instruments the DBSA has, its approach to infrastructure development instruments delves into three issues in a post-lockdown environment, he stated.

“[The DBSA] likes to see itself as part of the alternative funding sources structure. We want to see it as part of the high-impact lending; but we also want to see it as part of empowerment support in the space,” said Nhleko.

Therefore, one of the alternative sources of funds the DBSA has adopted after the capital markets started dislocating, right at the beginning of the Covid-19 pandemic, was to establish a green bond framework.

“We have successfully raised €200-million in April and another R2-billion last October. This is an important part of the tools because if you do not have the funding it becomes difficult to get involved in funding infrastructure,” he said.

The high-impact approach adopted by the DBSA focusses on funding innovative, complex infrastructure development processes and other similar processes. An example of this is high-risk infrastructure technologies, such as new ini...

Eskom instituted its first round of load-shedding this week after a short period of reprieve. Engineering News Editor Terence Creamer joins me to discuss the causes of the latest cuts and the prognosis for 2022.

The South African motor industry remains buoyant despite the disappointing state of the local economy, says National Automobile Dealers’ Association (NADA) chairperson Mark Dommisse.

January new-vehicle sales of 41 382 units showed a 19.5% increase over sales in the corresponding month last year.

“Franchised dealers were responsible for 84.2% of these sales, which gave them a flying start to a year that promises to build on the upward trend experienced in 2021,” notes Dommisse.

“What is amazing is that these heartening figures were delivered despite shortages of some models due to ongoing component shortages, particularly semiconductors, which are likely to be with us for most of this year. This shortage of product also means that few manufacturers or distributors are offering incentives to buyers, making January’s performance even more impressive.

“Rising interest rates and fuel prices will obviously have some impact on the market in 2022, but generally the outlook is brighter than at the same stage last year when [Covid-19] lockdown regulations were more stringent,” says Dommisse.

“January was interesting in that we saw better new-car stock availability than in recent months, but with lower stock levels of good used cars,” adds NADA vice-chairperson Alex Boavida.

“However, this month should not be seen in isolation, and we need to monitor the new-car versus used-car situation in the months ahead to see the actual trend.”

Boavida also notes that some sectors in the luxury segment of the car market improved in January, such as Mercedes-Benz doubling its monthly sales compared with the averages seen in the third and fourth quarters of last year.

“Another good example is Porsche which reported 204 units sold – a 114% increase on the figure in December. Sales of other luxury brands seem to be stabilising, but no massive recovery in this portion of the market is expected in the short term.”