The National Association of Automobile Manufacturers of South Africa (NAAMSA) expects a ‘challenging’ year ahead for the South African automotive industry.

NAAMSA says that the outlook is for pressure on domestic new vehicle sales, primarily due to projected steep new vehicle price increases in the pipeline due to the sharp weakening of the rand in recent months.

In 2001 the South African passenger car market expanded by 6.7% to 239,070 units. The market spiked towards the end of the year as consumers brought purchases forward ahead of expected January price increases. The December market was almost 19% ahead of year-ago levels.

Many industry observers forecast a flat or slightly down market for 2002 as a whole. However, the upside of the weak currency will be continuing growth in exports.