Audit, tax and advisory services firm KPMG believes imported passenger cars into South Africa may decrease from 72% of all local car sales in 2012, to 71% in 2013. This comes as the duty rate on imported vehicles has now stabilised at 25%.

If it materialises, the fall in percentage of imported cars in the sales mix will be the first drop since 1994. In 1995 the import duty rate was 71% and the percentage of imported cars sold in South Africa stood at 9%.

This 9% has steadily increased as the import duty rate has come down, hitting 32% of all car sales in 2001, 50% in 2005, 61% in 2007, and 69% in 2011.

While the percentage of imported vehicles in the sales mix may come down in 2013, the same is not true for the actual numbers in what is expected to remain a growing domestic market.

KPMG Africa Automotive leader Gavin Maile says the actual number of imported cars reached 318 000 units in 2012 and is expected to increase to 335 000 in 2013. However, the number of locally produced and sold cars are also expected to increase, at 140 000 in 2013, up from 122 000 in 2012. This number was 234 000 units in 1995.

Overall vehicle production in South Africa is expected to reach a healthy 654 300 units in 2013, says Maile, up from 539 424 units in 2012. Just short of 390 000 vehicles were produced in South Africa in 1995.

Exports are expected to reach 361 300 units this year (55% of local production), up from 277 893 units in 2012. Vehicle exports numbered 15 764 units in 1995, or 4% of production.

Maile attributes the expected healthy uptick in production and exports in 2013 to government’s new Automotive Production and Development Programme, which came into effect in January, and which rewards volume production.

According to KPMG data, Toyota was South Africa’s top vehicle producer in 2012, at 149 250 units, followed by Volkswagen, at 103 732 units, and Mercedes-Benz, at 61 297 units.

Toyota was also the top exporter, at 88 122 units, followed by Volkswagen, at 54 148 units, and Mercedes-Benz, at 49 825 units.

The top 2012 export destination outside Africa for vehicles from South Africa was the US, at 66 220 units, followed by the UK, at 41 111 units, and Japan, at 17 226 units.

However, says Maile, it is Africa that has been the real success story in 2012, with much room for further improvement. South Africa exported 24 281 vehicles to Algeria in 2012, followed by Nigeria as second most popular export destination, at 14 874 units – this up from 7 151 units in 2010.

Ghana exports have grown from 2 451 units in 2010, to 5 062 units in 2012, with Angola importing 7 783 vehicles from South Africa in 2012, up from 934 in 2010.

“These countries all have high gross domestic product growths,” says Maile. “Africa is a real solution for our vehicle exports.”

KPMG expects a total domestic new vehicle market of 675 000 units in 2013, up from 624 000 units in 2012.