Over the next two to three years, the South African automotive industry will see slower growth in new vehicle sales than has been the case the last three years, says Econometrix director and chief economist Dr Azar Jammine.

This comes on the back of a slowdown in consumer spending, brought about by interest rates holding steady rather than dropping, as well as an increase in bad debt – a process aided by a jump in unsecured lending.

Public sector wage increases are also expected to slow sharply, says Jammine, further curbing consumers’ buying power.

However, it is not all bad news, he adds. There is no expectation that the new vehicle market will collapse as it did in 2008 and 2009.

One reason for this is that the local market has not yet caught up to where it should be, despite its recovery over the last few years.

The potential buying power of the emerging black middle class should also serve as stimulus for the automotive market to grow, with these members of the middle class now outnumbering whites.

At the current rate of growth, 300 000 blacks enter the middle class each year, says Jammine.

Econometrix’s forecast is for new passenger car sales in South Africa to grow by 4.8% in 2013 and 5.1% in 2014. The light commercial vehicle market was expected to grow by 5.8% in 2013 and 7.2% in 2014.

Owing to the infrastructure boom seen in countries north of South Africa, sales of trucks will also continue to grow, says Jammine.

The medium truck market is forecast to grow at 5.9% in 2013 and 7.2% in 2014; heavy trucks at 4.1% in 2013 and 8% in 2014, and extra-heavy trucks at 2.5% in 2013 and 2.5% in 2014.

The Econometrix forecast for major exchange rates is for the local currency to reach R9.14 to the dollar by the end of this year and R9.59 at the end of 2014.

The rand:euro was expected to be R11.88 to the euro by the end of this year and R12.28 by the end of 2014.

The yen is expected to reach 11.05 to the rand by the end of 2013, and 10.46 by the end of 2014.

Jammine says the rand is forecast to gradually depreciate over time, ending up at around R10 to the dollar and R12.50 to the euro by 2015, “but not R20 to the euro or R15 to the dollar”.

Every time the rand falls, foreign investors again bring their money to South Africa, propping up the currency, explains Jammine. This means the country is unlikely to see a repeat of events in 2001 when the rand fell to almost R14 to the dollar.

“The game changed. South Africa is much more part of the international environment than before.”

Jammine believes the rand gained the manufacturing industry some competitiveness in recent months, without generating inflation.

“It’s a nice sweet spot we find ourselves in for South African exports.”