Jul 27, 2012
Uncertainties about local vehicle exports remainBack
Engineering|Africa|Environment|Ford|Africa|Europe|Algeria|Australia|France|Germany|Japan|South Africa|United Kingdom|United States|Automotive|Local Component Manufacturing|Manufacturing|Product|Service|Nico Vermeulen|Paul De Vantier|BMW 3 Series
© Reuse this
Naamsa director Nico Vermeulen tells Engineering News there is uncertainty regarding South Africa’s vehicle exports, owing to the impact of financial difficulties in Europe, as well as softer growth and uncertainty in international markets in general.
He notes the industry’s export performance will remain a function of the direction of the global economy.
As South Africa remains an export- orientated industry, global economic developments have been and will remain an important consideration that impacts on the local automotive industry’s performance.
Vermeulen notes, however, that any slowdown in exports to the eurozone could be offset by higher exports into the rest of Africa and Australia.
He adds that local vehicle export sales momentum should improve during the rest of the year, as several vehicle export programmes, such as the Ford Global Compact Vehicle Export Programme and the new BMW 3 Series export volumes, have been ramped up.
In June, 27 061 vehicles were exported, a 7% increase compared with the 25 294 vehicles exported in the same month last year.
The Automotive Industry Export Council (AIEC) expects more than 270 000 units to be exported and for automotive export levels to reach R100-billion in value this year.
Automotive Production Development Programme
The vision of the APDP, shared by government and industry, is to double vehicle production from about 600 000 units in 2006 to 1.2-million units by 2020.
The APDP will require substantial advances in terms of processes, competitiveness improvement, technologies and the scale on which the domestic industry currently operates.
The programme will emphasise local component manufacturing and seeks to shift the emphasis away from exports to achieving scale in the production of vehicles.
Further, government’s goal of creating five-million jobs by 2020 under the New Growth Path, as well as the National Planning Commission’s National Development Plan (NDP) aspiration to create 11-million jobs by 2030, will largely depend on the continuous successes of priority sectors, such as the local automotive sector, the AIEC’s Automotive Export Manual 2012 states.
The automotive sector is regarded as the leading manufacturing sector in South Africa, as it contributed 6.8% to the country’s gross domestic product last year.
The AIEC report highlights that the current global economic environment is dominated by intense competition for export markets, investments and technologies, making it important for South Africa to gain and maintain access to export markets.
Vermeulen says the industry exported vehicles to over 80 destinations in 2011. This figure will increase to more than 100 countries this year on the back of the Ford Global Compact Export Programme.
“The top markets were the US with 68 948 units, followed by the UK with 43 688 units, Algeria with 24 191 units, Japan with 22 475 units, France with 13 549 units and Germany with 8 362 units,” he notes.
In 2011, the 272 457 fully built vehicles exported from South Africa comprised 68.8% passenger cars, 30.9% light commercial vehicles and 0.3% medium and heavy commercial vehicles and buses.
Local new vehicle sales improved to 51 891 vehicles, an increase of 15.6% compared with the 44 876 units sold in June 2011.
Sales for the first half of 2012 remained 10.5% ahead of the comparable period in 2011.
Assisted by new model introductions, passenger car sales at 35 918 units, improved by 4 480 units, or 14.3% compared with the 31 438 new cars sold during June 2011.
Market intelligence provider for the automotive sector and Naamsa’s data processing service provider RGT Smart CEO Paul de Vantier says, while local vehicle growth levels are expected to taper off, single-digit growth is expected for the remainder of the year.
“We are forecasting growth of about 6% this year; however, some of the recent strong growth in the vehicle market could be the result of consumers buying ahead and taking advantage of the reduction in real car prices over the last few years,” he says.
Meanwhile, Naamsa says, despite indications that the local economy is slowing down even more, new vehicle sales continued to perform remarkably well under the influence of factors such as historically low interest rates, ongoing improvement in vehicle affordability, continual new model introductions, as well as improving demand for credit by households and businesses sup- porting the local market.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Other Automotive News
Updated 3 hours ago Temporary power generation services provider Aggreko has extended the contract for its 200 MW gas-fired power project in Côte d'Ivoire by three years, with the option to extend this by a further two years.
Updated 4 hours ago A Competition Tribunal hearing into alleged cartel activity and price-fixing by several companies in the wire and wire products manufacturing industry was again postponed on Monday pending a decision by the Competition Appeal Court (CAC). Respondents Allens Meshco,...
Updated 4 hours ago The share price of cement producer PPC fell by as much as 8.6% on Monday on the news that it expects its headline earnings per share (HEPS) for the six months to end March 31, to be as much as 45% lower than in the comparable period the year before. The company,...
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...