Associated Motor Holdings (AMH) and Amalgamated Automobile Distrib- utors (AAD) acted as a “big drag” on new-vehicle sales in January, while members of the National Association of Automobile Manufacturers of South Africa (Naamsa) held steady, says Econometrix director and chief economist Dr Azar Jammine.
Although Naamsa also has many importers among its membership, such as Suzuki and Mahindra, the bulk of sales from within its ranks come from local manufacturers, such as Toyota, Volkswagen, Nissan, General Motors, Ford, BMW and Mercedes-Benz.
AMH and AAD are solely importers, bringing brands such as Hyundai, Kia and Chery to the local market.
According to the Department of Trade and Industry (DTI), new-vehicle sales in South Africa decreased by 6.8% in January to 53 025 units, compared with the same month last year.
However, as Jammine notes, most of this can be attributed to declining numbers at AMD and AAD.
Naamsa members sold 46 520 units in January 2014, a marginal drop, compared with the 46 999 units sold in January 2013.
AMH and AAD sales, however, dropped from 8 008 units in January 2013 to 6022 units in January 2014.
The pressure on imported goods, owing to the weak rand, will be great this year, says Ford Motor Company Southern Africa (FMCSA) president and CEO Jeff Nemeth.
Any vehicle built locally, despite still sporting a large percentage of imported content, will not be “as susceptible” to the effects of a weakening currency as a fully imported vehicle.
Nemeth says local manufacturers are also assisted by government’s manufacturing support programme, the Automotive Production and Development Programme (APDP), which helps to offset duties payable on imported vehicles.
“So there is an advantage, yes. We probably feel less of the impact from the rand than our peers who import cars.”
Local vehicle manufacturers will typically use credits earned under the APDP to import the vehicles within its brand which are not manufactured locally.
In an effort to neutralise the rampant rand, Nemeth says, there is a “renewed focus” within FMCSA to increase the percentage of local content on its Pretoria-made Ranger bakkie.
“Maybe we now have a renewed ability to get these business cases to work.”
Nemeth says FMCSA “pretty much did everything” it could to localise as many parts as possible when it initiated the Ranger production programme some years ago. However, there remained a “few items on the fence” that can now possibly be produced locally in a cost-efficient manner.
However, he adds, FMCSA can only localise the parts for which there are local component suppliers.
“We would like to sit down with the DTI to see how we can attract new suppliers to South Africa, which can then unlock a lot of new products for localisation.”