Car makers scale down production
Naamsa’s reduction of projections for total domestic production follows the recent interest rate increase, which was the second in weeks. As a result, rate hikes are expected to take the steam out of the unprecedented records of new vehicle sales experienced recently.
In a review for the second quarter of this year, Naamsa executive director Nico Vermeulen said they expected
621 900 vehicles to be produced this year. The previous projection was 636 900 units.
Vermeulen said interest rate increases, record energy and vehicle operating costs were among factors that would put brakes on new vehicle sales during the remainder of this year.
However, even with the revised projection, he said the local automotive industry was already on course to another record year in new vehicle sales.
Vermeulen also warned of possible increases in vehicles prices.
“The weaker exchange rate and substantially higher producer price inflation will place pressure on new vehicle pricing, which has remained virtually unchanged over the past three years,” he said.
In the second quarter of the year, new vehicle sales showed an increase, with all the four segments ‘ passenger, light commercial, medium commercial and heavy commercial vehicles ‘ reporting gains, compared to the same period last year.
“However, the rate of growth, with the exception of the heavy truck segment, slowed considerably compared to previous quarters,” Vermeulen said.
Passenger vehicles sales were down 0,2 percent compared with the first quarter of this year.
Light commercial vehicles sales fell 3,2 percent compared with the first quarter.
Medium commercial and heavy commercial vehicles increased 18,1 percent and 25,9 percent respectively. Naamsa has also reduced this year’s projected aggregate exports from the previous 210 400 units to 195 400.
Vermeulen said in the first six months of this year 80 651 units were exported compared with 51 823 units in first half of last year. Aggregate exports were expected to increase 40 percent this year compared with last year.
He said, at 37 848 jobs, employment levels in the industry reached the highest aggregate level in the past 10 years.
“The main reason for this growth is the increase in production associated with higher levels of sales and particularly the ramping up of major export programmes,” he said.
The number of new vehicle sales in July increased 20,8 percent, compared with the same month last year. All the vehicle segments showed increases in sales compared to July last year. ‘ Business Day.