SA vehicle production set to decline

Comment on this story
IOL mot aug20 vehicle production . An Isuzu bakkie rolls down the General Motors assembly line in Port Elizabeth. The company posted an 11 percent manufacturing increase in the first quarter.

Johannesburg - Total forecast domestic new vehicle production for this year has been slashed by 27 000 units to 544 400 from the 571 400 forecast in the first quarter of this year.

This is the second downward revision of output forecasts this year by the National Association of Automobile Manufacturers of SA (Naamsa).

In May, it revised its initial total industry production figures downwards by about 20 000 units to 571 400. Last year, 545 913 vehicles were produced.

The latest quarterly business review of business conditions in the new vehicle manufacturing industry released by Naamsa yesterday also revealed that total industry employment levels dropped by 465 jobs to 29 381 at the end of June from 29 803 at the end of April this year.

Director Nico Vermeulen said two vehicle manufacturers had reduced their headcount during the second quarter.

Metair, the listed automotive components manufacturer, revealed yesterday that total production by domestic original equipment manufacturers (OEMs) had declined by 14 percent to 233 723 units in the first half of this year from the 271 541 produced in this period last year.

Production by Mercedes-Benz South Africa was sharply lower in this period at only 3682 units compared with 25 692 last year. This was attributable to the run out of production of the previous C-Class model and ramp-up of production of the replacement model.

However, Toyota’s output in the six-month period declined by 14 percent year-on-year to 69 078 units from 80 172, Volkswagen’s by 11 percent to 49 321 units from 55 253, and Nissan by 22 percent to 20 361 units from 26 260.

AFRICAN DOORS CLOSING

Theo Loock, Metair’s managing director, attributed this to the introduction by some emerging markets in Africa of duty protection on new vehicle imports, which had reduced the export opportunity “a bit” in those countries as well as weaker domestic demand for new vehicles.

Increased production by the Ford SA and General Motors GMSA partly offset the decline in production.

Production by Ford increased by 20 percent to 32 991 units from 27 572, and GM by 11 percent to 21 439 units, up from 19 252. BMW’s production was 489 units lower.

The lower production figures cited by Metair were reflected in the industry’s production capacity utilisation in Naamsa’s quarterly review.

Production capacity utilisation for cars was at 52.6 percent in the second quarter, the lowest level in at least the previous seven years, and reached a low during the second quarter of only 18 percent.

Vermeulen said capacity utilisation in the new car manufacturing segment was affected by low capacity utilisation by one manufacturer, and the strike in the metal and engineering industry.

Vehicle exports to Europe rose by 2.3 percent in the first half of this year to 42 005 units but declined to Asia by 41 percent to 11 180 units, North America by 36.4 percent to 23 766 units, Australasia by 31.7 percent to 5 434 units and Africa by 20 percent to 33 782.

Vermeulen said not too much should be read into these vehicle export figures because export sales were affected by the lack of a meaningful contribution by Mercedes-Benz and should increase in the second half of this year by between 40 000 and 50 000 units.

But Vermeulen said some international export business had been lost because the industry’s reputation and track record as a reliable supplier had been severely dented by recent strikes.

Business Report



sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.