Having confounded most pundits by growing at a rate of 5.3% in 2003, the South African motor industry should post further gains in 2004, although many of the variables which saw it perform so well last year are still in place and could prove equally volatile, writes Dave Cumming.
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In fact, the National Association of Automobile Manufacturers (Naamsa), not given to exaggeration, says the new car and commercial vehicle markets could be in for “an exceptional year – one of the best since the mid 1980s”.
THere is little surprise, then, in the consensus forecasts of industry experts who are expecting growth of between six and 10% for calendar 2004. Passenger car sales are expected to lead the way and could even approach the 300,000 units last sold in 1980. But gains in all sectors are expected, with the widest divergence of opinion in the field of heavy vehicles where some predict a continuation of the 2003 performance which saw sales rise 27% and others expecting the market to pause for breath.
The factors influencing the positive outlook are the prospect of lower interest rates, a stable currency at realistic levels, greater affordability of cars for private owners, increased disposable income, higher consumer and business confidence on the domestic market, intense competition driving low margin deals, the real possibility of legislative change to allow private leasing and lower inflation.
But many of the economists who concede the presence of all these factors warn that they could change rapidly. They point out that at the beginning of 2003 the currency had only just emerged from the doldrums and a period which made exports super-competitive. Interest rates were high and consumer confidence low. All that did not prevent a swift turnaround.
That turnaround saw sales of 247,259 passenger cars (up 6.7%), 104,884 light commercials (up 0.1%), 6,100 medium commercials (up 7.6%) and 10,211 heavy commercials (up 27%).
