South Africa’s motor industry posted record capital expenditure during 2006 and projections for 2007 show planned investments to continue at near record levels, the National Association Of Automobile Manufacturers Of South Africa (NAAMSA) said in its latest quarterly review.
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Steady growth in production is set to continue during 2007 on the back of further growth in vehicle exports. During 2006, South Africa’s share of global production rose to 0.85% up from 0.79% in 2005.
The automotive sector’s contribution to South Africa’s gross domestic product during 2006 was 7.53% and industry employment remains stable, close to record levels though “some pressure on industry employment” is expected during the second/third quarters.
Industry capacity utilisation last year remained above international norms but lower capacity utilisation in the new car production sector was apparent during the first quarter of 2007.
Domestic sales are expected to grow more modestly in 2007, with growth likely to be constrained as a result of tighter monetary conditions and vehicle price inflation.
NAAMSA anticipates that the new car market for 2007 will record modest growth with new car sales improving by between 4% and 6% in volume terms.
Supported by infrastructural development spending and construction activity and further growth in domestic fixed investment, new commercial vehicle sales are expected to outperform the car market with an improvement in domestic sales of about 11%.
“Coming off the record base established in 2006, the more modest anticipated growth during 2007 will still represent a noteworthy achievement,” NAAMSA said in the report.
2007 first quarter passenger car sales at 103,997 units recorded a decline of 177 units or 0.2% compared to the 104,174 new cars sold during the corresponding quarter for 2006.
Combined commercial vehicle sales during the first quarter of 2007 at 58,622 units reflected a gain of 7,632 units or an improvement of 15.0% compared to 50,990 units sold during the corresponding quarter of 2006.
2006 export sales of South African produced motor vehicles rose to 179,859 units compared to 139,912 new vehicles exported during 2005 – an improvement of 39,947 units or 28.6%.
Higher projected exports of light commercial vehicles should result in record industry export sales during 2007. Overall exports are projected to improve by about 11.5% year on year.
A local newspaper report said NAAMSA said separately that the 2006 and 2007 figures may increase further since capital expenditure data from a number of specialist truck manufacturers was still awaited.
