VW's Polo Vivo plant in Port Elizabeth. Picture: Supplied
VW's Polo Vivo plant in Port Elizabeth. Picture: Supplied
Edition M Sport Shadow. Exports of the BMW 3 Series models were gradually being scaled down ahead of BMW stopping the production and export of this model to the US.
Edition M Sport Shadow. Exports of the BMW 3 Series models were gradually being scaled down ahead of BMW stopping the production and export of this model to the US.

JOHANNESBURG - Employment in South Africa’s vehicle manufacturing industry remained stable in the second quarter of the year, despite the depressed economy.

The total industry head count increased by 0.5% or 159 jobs to 30 356 in the last week of June from 30 251 in the last week of April. This is according to the latest quarterly review of business conditions in the new vehicle manufacturing industry for the second quarter released this week by the National Association of Automobile Manufacturers of South Africa (Naamsa).

Nico Vermeulen, the director of Naamsa, said yesterday that the stable employment in the industry was encouraging in an economy where every few days one or other company or sector was reporting a reduction in head count. The quarterly review said that with the exception of the fourth quarter of last year, industry employment had remained stable over the past four years.

Industry employment declined by 6% or 1 900 jobs to 29 489 at end-December, from 31 389 in the last week of October last year. Naamsa at the time attributed this fairly substantial decline largely to the lay-off of temporary workers at three major industry plants.

Average industry employment last year was 30 953, compared to 31 260 in 2015. The slight increase in industry employment levels in the second quarter of this year was driven by an improvement in production capacity utilisation levels for cars, light commercial and medium commercial vehicles. The capacity utilisation levels for heavy trucks and buses declined substantially to 68.1% in the second quarter from 74.3% in the first quarter of 2017.

The review said vehicle exports to Asia, Europe and Australasia held up well in the first half of the year, but vehicle exports to North America showed a substantial decline. Total vehicle exports for the first half of the year declined by 7.4% to 155 236 vehicles from 167 663 units in the corresponding six-month period last year.

This was driven largely by the -40.7% decline in vehicle exports to North America to 16 744 units in the first half of this year and -39.2% reduction in exports to South America to 1471 units. Vermeulen said the decline in vehicle exports to North America could be attributed to the possibility that exports of the BMW 3 Series models were gradually being scaled down ahead of BMW stopping the production and export of this model to the US.

This was in preparation for its production of the BMW X3 and exports of the Mercedes-Benz C Class, which were best estimates rather than accurate data, because some vehicle manufacturers did not report on their exports by geographic destination. Vehicle exports to Africa declined by 6.2percent year-on-year to 10888 units in the first half of the year.

Vermeulen said sales to African markets continued under pressure because of various factors. These included the impact of ad hoc import duty increases and regulatory and technical specification changes in various African countries, compounded by the ongoing difficult economic conditions in most African economies. He said the outlook for the new vehicle manufacturing industry in the second half of the year remained uncertain.

“Political tensions and subdued economic growth prospects continue to impact negatively on business confidence and customer sentiment. “Domestic new vehicle sales are correlated with the overall performance of the economy and confidence levels,” he said.

- BUSINESS REPORT