SA motor industry on the mend
20 April 2010
The worst seems to be over for South Africa's automotive sector, as new vehicle sales continue grow, employment in the industry starts to pick up, and export projections are revised upwards.
"Expected improved economic activity levels, the benefit of lower interest rates on the back of declining inflationary pressures and an improvement in the financial position of consumers will contribute to an improvement in new vehicle sales in 2010," the National Association of Automobile Manufacturers of South Africa (Naamsa) said in a statement this week.
Exceptional growth
Naamsa data shows that passenger car sales reached 81 450 units for the first quarter of 2010, an exceptional increase of 14 371, or 21.4%, compared to the 67 079 new cars sold during the corresponding quarter of 2009.
Combined commercial vehicle sales during the first quarter of 2010 stood at 39 446, an improvement of 3 464 units or 9.6%, compared to 35 982 units sold during the corresponding quarter of 2009.
On a quarterly basis, sales of new vehicles in all segments recorded exceptional gains compared to the corresponding quarter in 2009, with the resurgence in new car sales growth during the first quarter representing one of the best on record.
"The latest sales figures confirm that the industry is in the process of emerging from the extremely severe recession in the domestic automotive market which started mid-2006 and lasted through the end of 2009," Naamsa said.
However, the association says the improvement should be seen in the context of the historically low base in the first quarter of 2009, when sales were particularly depressed as a result of the uncertainty arising from the global financial and economic crisis.
There has also been an increase in the numbers of people employed by the automotive industry, with the improvement being attributable to additional recruitment at here of the industry's major employers, while employment levels at other manufacturing plants remained stable during the quarter.
Increased sales, production, jobs
As of the first quarter of 2010, the industry directly employed 31 357 people, an improvement of 1 196 jobs, or 4%, over the 30 161 people employed at the end of 2009.
Sales projections for 2010 have also been revised upwards - in aggregate terms, domestic sales are expected to improve from the 395 000 in 2009 to about 451 000 in 2010 - an increase of around 14.0%.
However, Naamsa notes again that the improvement will be off a very low base.
Factoring in the expected improvement in domestic sales together with anticipated growth in exports, domestic production of motor vehicles in South Africa during 2010 is expected to rise from 374 000 vehicles produced in 2009 to about 443 000 units - an increase in vehicle production of about 18.4%.
SAinfo reporter
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