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Naamsa reduces projected 2013 vehicle output by 9.5%, Q3 new car sales up 6.4%

12th December 2013

By: Leandi Kolver

Creamer Media Deputy Editor

  

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Owing to international developments and widespread strikes in a number of sectors, the National Association of Automobile Manufacturers of South Africa (Naamsa), has reduced its projected 2013 vehicle output by 9.5% to about 552 000 vehicles, from original projections of 610 000 units.

The major contributor to the decline was an expected drop in exported vehicles from the previously projected 336 000 units to a revised forecast of 281 000 units, a fall of 20.1%, Naamsa said on Wednesday, in its latest quarterly review of business conditions. 

“However, industry production is expected to rise significantly – particularly [with regard to] light commercial vehicles – over the next few years on the back of the Automotive Production Development Programme (APDP),” Naamsa added.

Meanwhile, third-quarter new car sales, at 125 189 units, recorded an improvement of 7 512 units, or 6.4%, compared with the 117 677 new cars sold during the corresponding quarter of 2012, while commercial vehicle sales during the third quarter, at 50 750 units, recorded an increase of 2 988 units, or a gain of 6.3%, compared with the 47 762 units sold during the third quarter of 2012.

“All sectors registered gains [in sales] during the three months ended September compared with the corresponding quarter in 2012. In particular, on a year-on-year comparative basis, sales of medium and heavy commercial vehicles – largely unaffected by industry strikes – performed well,” Naamsa said.

The association added that vehicle manufacturing industry employment levels increased by 1.5%, or 441 persons, quarter-on-quarter during the three months ended September, to reach a total employment level of 30 344 individuals.

“Employment levels are expected to stabilise at current levels and could increase over the medium term, as manufacturers ramp up production for export markets,” Naamsa said, adding that the average monthly industry employment figure for 2012 was 29 180 employees and, therefore, the current industry employment level reflected a steady increase.

Further, the industry’s average use of capacity, during the third quarter, registered significant declines in all segments, reflecting the impact of the industrial action experienced from the middle of August to the end of the third quarter.

Meanwhile, the automotive industry’s capital expenditure (capex) remained close to record levels during the third quarter and was expected to exceed R5-billion in 2013, the association pointed out, adding that the relatively high levels of capex could largely be attributed to investment projects by manufacturers in terms of the APDP.

FUTURE OUTLOOK
Naamsa said that, over the balance of the year, domestic sales were expected to moderate and reflect lower growth momentum.

Following four successive years of growth in domestic new vehicle sales, prospects for 2014 will be affected by slow economic growth and above-average new vehicle price inflation. At this stage, modest growth, at best, was expected.

Meanwhile, export sales remained a function of the performance and direction of global markets and, while vehicle exports into Europe remained under pressure as a result of the recession, higher exports into Africa, Asia and North America – factoring in the contribution of various new export programmes – should enable the industry to increase production levels over the next few years, Naamsa said.

Aggregate exports for 2013 were now estimated to reach about 281 000 vehicles compared with the 277 893 vehicles exported in 2012.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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