The South African automotive industry last year posted a record trade deficit of around R49-billion, up from 2011’s R35-billion, which was already a record, says National Association of Automotive Component and Allied Manufacturers (Naacam) executive director Roger Pitot.

He says this means the local automotive industry is responsible for more than 40% of the country’s 2012 national trade deficit of R117.7-billion, up from the R16.9-billion national deficit recorded in 2011.

The deficit could be attributed to the rapid increase in the number and value of imported cars. “Total automotive imports were higher than ever, at around R136-billion in 2012,” says Pitot.

In comparison, exports for the automotive industry reached almost R87-billion, the second highest following the record set in 2008.

Replacement parts made up R35-billion of the import number, imported vehicles roughly R50-billion, and component imports by original-equipment manufacturers (OEMs, or local vehicle manufacturers) around R51-billion.

Pitot says there was a particular steep rise in component imports from Thailand, which he attributes to the assembly of the new Ford Ranger pickup, in Pretoria.

He also notes that vehicle imports from India and the UK showed a strong surge in 2012 compared with 2011.

Looking at the total market, it appears the local automotive industry still imports most of its needs from Germany, followed by Japan.

Pitot says component exports from South Africa went down in 2012, as predicted earlier by Naacam.

In rand terms component exports dropped by R2-billion, from R39-billion in 2011, to R37-billion in 2012.

“Exports to the European Union alone declined by R4-billion, almost all of which related to catalytic converters,” notes Pitot.

Total catalytic converter exports from South Africa dropped from R19.6-billion in 2011, to R16.3-billion in 2012. Catalytic converter exports remained South Africa’s number one component export in 2012.

Leather exports also continued to decline, dropping almost 20% in 2012. Exports now stood at R1.7-billion, down from R2.9-billion two years ago, says Pitot.

Leather was still South Africa’s second biggest component export in 2011, but moved down to number four in 2012.

Engine parts moved into second spot in 2012, at R2.8-billion, up from R2-billion in 2011. Automotive tooling also showed healthy gains, increasing by 70% from 2011 to almost R800-million in 2012.

Pitot says the shrinking leather seat and kit industry comes courtesy of European car makers not placing new business in South Africa owing to cost reasons.

While the weakening rand in 2012 did manage to buoy the local component export industry, other competitive issues, such as rising labour and electricity costs, largely negated any gains made last year, adds Pitot.

Looking to 2013, he does not want to make any forecasts on component exports, owing to the volatile exchange rate. However, in foreign currency terms, he expects exports to take a 5% to 10% knock, following this year’s 10% decline (in foreign currency terms).

He says this can be linked to the depressed European market, as well as the start of the Automotive Production and Development Programme (APDP).

The previous government support programme, the Motor Industry Industry Development Programme, allowed local OEMs to receive benefits for component exports, which will not happen on the same scale under the APDP.