Motor industry exiting recession

Johannesburg - Most sectors of the South African Automotive Industry retail, component production and vehicle assembly continue to experience sustainability challenges, the National Association of Automobile Manufacturers of South Africa (Naamsa) said in its latest quarterly review of business conditions released on Monday.

It noted that performance indicators confirmed that the South African automotive industry remained in recession, however, there were indications that the bottom had been reached.

For the 2009 third quarter Naamsa reported passenger car sales at 57 855 units recorded a decline of 18 776 units or 24.5% compared to the 76 631 new cars sold during the corresponding quarter of 2008.

Combined commercial vehicle sales during the third quarter of 2009 at 34 230 units reflected a fall of 12 520 units or a decline of 26.8% compared to 46 750 units sold during the corresponding quarter of 2008, said Naamsa, noting that on a quarterly basis, sales of new cars, light, medium and heavy commercial vehicles registered further sharp declines compared to the corresponding three months of 2008.

"However, 2009 third quarter sales of cars, light commercial, heavy commercial vehicles and buses registered double-digit gains compared to the previous quarter's sales - suggesting that the market's low point occurred during the second quarter of 2009," it said.

"However, year-on-year comparisons continue to reflect an industry in recession."

"The general consensus is that the industry is in the process of emerging from the extremely severe recession in the domestic automotive market which started mid 2006," said Naamsa.

"However, any expected improvement over the short to medium term is likely to be slow and gradual off an historically low base," it said.

- I-Net Bridge