The past few years have seen the South African Automotive industry growing at a slow steady rate, however 2014 is expected to reflect a decline in sales volumes compared to 2013 by about 5 to 6%.
This decline can be mainly attributed to a lack of consumer confidence, increased vehicle pricing (above inflation) due to weakness in the exchange rate, the increase in the number of unemployed people, and the interest rate cycle starting to tend up. A major negative factor is the productivity and cost of labour. Strike action over the past two years have caused production lines to come to a halt. Other negative factors include the cost of energy and logistics.
Production in 2014 is expected to see increased volumes compared to 2013, due to less labour disruptions as well as certain OEM’s having recommenced production after a period of little activity whilst their production lines were converted to new models. The South African market is dominated by imported vehicles. Over two thirds of vehicles sold in South Africa are imported and over half of our production is exported. The recovery of “mature markets” is good news for our exports.