The South African auto industry is experiencing a new wave of confidence, Ian Nicholls, Director of Planning for General Motors SA told the South Africa Automotive Conference.

Forecasts are that the domestic market could double in the next five years to reach 900,000 units. "We have low inflation, low interest rates and GDP is stable at between 4-6%," he said. Sales in 2004 were up by 22% over 2003 to a record 450,000.

Vehicle exports have grown from almost nothing 10 years ago to account for more than 30% of production; black spending power was also buoyant. "In 2000 black spending accounted for only 7% of new cars, today it is between 15 and 20% and in excess of 40% of the used car market," said Nicholls.

Sales of diesel passenger cars were also beginning to climb from less than 10,000 units in 2000 to almost 40,000 last year. Low sulphur fuel, which will be introduced in 2006, will add to the growth in sales.

But there are concerns. Emissions control legislation in SA is well behind that in developed markets and the country has an ageing vehicle parc.