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Capex at SA auto plants expected to climb to record levels again in 2015

27th March 2015

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review.

Capex by the country’s seven major vehicle manufacturers and various truck producers reached R6.91-billion in 2014 and R4.34-billion in 2013.

Last year’s capex already represented a record, notes Naamsa.

“Relatively high levels in capex in recent, and particularly future, years may be attributed to investment projects by manufacturers in terms of the Automotive Production and Development Programme.”

Naamsa also reports that employment in the automotive assembly industry had grown to 30 466 people in the fourth quarter of last year, which is an increase of 1 478 jobs, or 5.1%, compared with the industry headcount at the end of the third quarter of 2014.

The association believes the “substantial increase” in the industry headcount is related to higher levels of vehicle production during the fourth quarter, as well as expected growth in vehicle output in 2015.

South African new-vehicle production increased marginally to 566 083 vehicles in 2014, up from 545 913 units in 2013.

Naamsa expects 2015 production to grow 10%, to 625 000 units.

The association also highlights that new-vehicle exports from South Africa to the rest of Africa fell by 21.8% in 2014 to 61 593 units.

Exports to Europe increased 27.2%, to 101 530 units in 2014, with exports to North America down 26.6%, to 47 985 units, and exports to Australasia up 88.6%, to 29 856 units.

Naamsa expects domestic new-vehicle sales to increase by around 3% in 2015, compared with last year.

“However, the key imponderable involves security and stability of electricity supply.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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