Relief for auto industry in 2010
The National Association of Automobile Manufacturers (Naamsa) predicts an increase of 6.5% in sales of new cars for 2010 as global credit markets begin to thaw. The local economy has officially moved out of recession but activity is still slow as households and businesses continue to spend carefully.
Car dealers, manufacturers and motor industry executives in South Africa anticipate the release of the complete sales statistics for 2009 later today. Figures released for November 2009 indicate a 27% decline in new car sales compared to November 2008. December is usually the slowest car sales month of the year and the numbers released today are likely to indicated further decline.
Car sales figures for 2009 have caused a stir internationally. The US motor industry received a shrill wakeup call when total sales were the lowest since the 1983 recession and China officially took over as the largest auto market. Asian car makers claimed 47.4% of total market share last year, up 3% from 2008.
While US companies battled a stifled economic climate, Reuters reports that major Chinese automaker Dongfeng recorded 37.8 % growth acceleration in the first three quarters of 2009. Dongfeng attributes its success as well as that of other Chinese auto firms to the support of government policy. Beijing implemented heavy reductions in sales tax on small cars and subsidies for buyers in rural areas, which effectively rejuvenated demand for automobiles.
Naamsa’s figures indicate possible imminent relief for the industry in South Africa, and those who can afford it may well be making a trip to their favourite car dealers in 2010. Many top manufacturers are gearing up for smoking hot new releases. This year car fanatics will be drooling over the Lexus LFA, BMW 5 Series, Porsche Boxster Spyder and Mercedes-Benz SLS AMG, to name only a few.
Even if the market does not recover as anticipated South African car dealers and manufacturers can always rely on a steady flow of business from government. All ministers in President Zuma’s expanded cabinet enjoy luxury automobiles to the value of over a million rand.
Finance minister Trevor Manuel admitted that purchase of his R1.2 million car was “an error in judgement”, but has yet to trade it in for a cheaper model.
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