National Automobile Dealers’ Association


Welcome to the first edition of the NADA Newsletter for 2023. This issue is jampacked with interesting and important information relating to our industry.

 South Africa is fast approaching the critical deadline set by the Financial Action Task Force (FATF) and will soon know whether it will be added to the global grey list or not. According to Intellidex founder and analyst Stuart Theobald: “The consequences of greylisting are that other countries must treat SA with a heightened level of suspicion. In practice, this means more frequent assessments, requests for more details on sources of funds and procedures, and more senior management engagement with foreign counterparts.”

 Law experts are saying that whether South Africa is greylisted or not, the public and private sectors need to come together to tackle the serious issues raised by the FATF. “Even if the country is put on the grey list, South Africa will be able to continue functioning – albeit at an increased cost – until the appropriate protocols are in place, which is likely to happen fairly quickly, if the current momentum is maintained,” said Rashaad Carrim, a partner at law firm Webber Wentzel.

 As you are all aware, high-value goods dealers have been included as a new category of accountable institutions following amendments to the Schedules to the FIC Act, which came into force on 19 December 2022. We need to continue to take the necessary measures to comply with the legislation. The FIC team has written a special piece for NADA which is featured in this issue. It is full of vital information and relevant links to provide a bit more clarity as to all processes and documentation.

 Also featured is data from Lightstone as to what consumers are purchasing. Great insights which align with Mark Dommisse’s commentary in recent interviews on SAfm, PowerFM and Newzroom Afrika.

 Please read the South African Automotive Retail Financial Performance Trends from the MSX SSA Team, so interesting.

 If you haven’t registered already for the NADA Conference in March, please go to the link at the bottom of the newsletter. It promises to be a gathering not to be missed.

 Gary Scott, CEO of Kia South Africa, and the Vice President: Retailing OEMs, of naamsa, the automotive business council, shares his thoughts on trends, and Kriben Reddy from TransUnion shares his experience at the recent NADA convention in Dallas, USA. Fascinating insights from both industry experts.

 This is a whopper of an issue, full of thought-provoking reading. Enjoy!

 Best wishes

Gary McCraw

National Director


Application of targeted financial sanctions in South Africa for high-value goods dealers

By meeting their regulatory obligations, certain motor vehicle dealers listed in the Financial Intelligence Centre Act (FIC Act) as high-value goods dealers can play their part in combating terrorist financing and proliferation financing of weapons of mass destruction, among others, through the application of targeted financial sanctions (TFS).

Growth trend continues for crossover/SUVs in the passenger market
Expect a comeback from Double Cab Pick-Ups in LCV market

Lightstone takes a look at what trends to expect in 2023 in the Passenger, Light Commercial and Electric and Hybrid Vehicle markets.

Key trends in the automotive industry for 2023

By Gary Scott, CEO of Kia South Africa

In the late 20th century and early 2000s, facial recognition was a futuristic fantasy. Remember 2001: A Space Odyssey and Minority Report? Today, facial recognition is being used by consumers to unlock their phones and computer screens, and it’s becoming increasingly common during onboarding flows across the financial services industry.

South Africa – Automotive Retail Financial Performance Trends – March 2021 to October 2022

The global economic trends impact us in South Africa and so we should take cognisance of these. Inflation appears to be slowing down in certain countries a sign that higher interest rates are reducing the demand for credit .

 Post covid supply chain disruptions are dwindling but persist in automotive sector. The Ukraine conflict has had a far-reaching impact on a multitude of sectors in the global economy and in particular energy, which feeds into manufacturing and distribution processes globally.

NADA USA: Yesterday’s Concepts Start Hitting the Road

By Kriben Reddy, TransUnion Africa, auto information solutions vice president

In the late 20th century and early 2000s, facial recognition was a futuristic fantasy. Remember 2001: A Space Odyssey and Minority Report? Today, facial recognition is being used by consumers to unlock their phones and computer screens, and it’s becoming increasingly common during onboarding flows across the financial services industry.

 More importantly, it offers important pointers and guidance to the rest of the world on whether we’re on the right track to successfully evolve the industry to meet rapidly changing needs and demands.

 This year’s show was held in Dallas, Texas, and it was just as big and bold as you would expect. Interestingly, the major trends in the auto industry haven’t changed much – autonomous vehicles, mobility as a service, electric vehicles (EVs), customer experience and the use of data – but what we’re starting to see is that they’re starting to move from concept to reality.

 Here are my key takeouts from the NADA show – and how they affect us in South Africa.

 EVs will stay high on the agenda

 There’s no doubt that EVs are the future of cars. In the EU, you won’t be able to buy a diesel or petrol car after 2035. Globally, a total of 10.5 million new battery powered EVs (BEVs) and plug-in hybrid EVs (PHEVs) were delivered during 2022, an increase of +55 % compared to 2021.1 While growth slowed to 15% in Europe following two years of steep sales increases, EV sales in USA and Canada increased by 48 % year-on-year, despite a weak overall light vehicle market.

 In South Africa, we are clearly well behind the global curve, for a number of valid reasons. We have the most advanced e-mobility market in Africa, but we only sold around 1,000 EVs in 2022 out of a total fleet of 12 million cars.2 But sales are increasing rapidly, with several brands releasing new models in the past couple of years.

 And there’s the bottom line: EVs are going to stay a talking point until they are 100% mainstream. For dealers, that means learning how to sell them and service them. For lenders and insurers, that means finding the right financing and risk models. But there’s no ignoring them.

 Data can improve your business

 We’ve been talking about how the industry can use data better for some time now. But in South Africa, we’re still in our baby shoes when it comes to using data to target and find new customers, and to provide a better customer experience.

The fact is that the automotive industry today, like many others, is a data-driven industry. Across the entire industry, we should be rapidly ramping up our efforts to use data to get new insights into our businesses, and make better decisions to maintain and expand market position in a tough trading environment.

 Successful businesses understand the value of their customer’s trust and loyalty, and the effective use of data allows the ability to provide greater levels of service and an unparalleled customer experience. More importantly, the smart use of alternative data allows us to qualify customers who may previously not have qualified for financing under traditional models. And right now, we need every customer we can get.

 Mobility as a service is here to stay

 One panellist at NADA talked about how the trend of shared mobility hadn’t really taken hold in the US yet. For me, shared mobility is only one aspect for the far broader trend of mobility as a service. Ordinary South Africans need a way of getting from point A to point B. But not all of them can, or want to, buy a car to do so.

 So, what alternatives can we offer them beyond buying and leasing cars? What can we do to meet the mobility needs of a vast untapped market? These are existential questions that go to the future relevance of the industry.

 Some of those solutions will include the use of EVs. They should all increasingly use data. But at the end of the day, we’re going to have to meet the needs of a new era of consumers if we want to survive and thrive.

 Tech and digitisation are our friends

 We’re increasingly seeing the usage of digital tools and technology to solve some of the industry’s most pressing challenges in areas like compliance and regulation, fraud mitigation and providing slicker customer experiences throughout the buying process.

 Compliance and regulation requirements are only going to grow in the coming years, but with the right tools, it’s far easier to digitally onboard your customers while ticking the necessary KYC and fraud protection boxes.