Strike to slow down car sales

Johannesburg - The planned strikes by Transnet workers may hit the strong upward trend seen in new vehicle sales this year. The number of new cars sold in the country during April increased by 36% to 35 763 units compared to the same month in 2009, according to the National Association of Automobile Manufacturers of South Africa (Naamsa).  

"The outlook for domestic sales for 2010 remains relatively positive," said Naamsa.

However, vehicle sales in May could be disrupted if striking transport workers halt the the movement of new vehicles from factories to dealerships, said Jacques Brent, vice-president of marketing and service at Ford Motor Company SA.

Brent estimated that the strike could reduce the number of sold units by  10 000 during May, compared to April.

The South African Transport and Allied Workers Union (Satawu), which represents 85% of Transnet workers, has entered into a wage dispute with the transport utility. The nationwide strike is set to kick off on Monday and will affect road and rail transportation. 

"Dealers keep half a month to a month’s stock on site," said Brent. "I think after two or three weeks we could start seeing problems."

The strike will also affect the movement of imported vehicles and components at local harbours. Several car manufacturers are already looking at unloading cargo in Maputo, Mozambique.

Vehicle sales have been on an upward trajectory in 2010, surpassing industry expectations and prompting revised projections of aggregate sales for the year to around 14%.

"In January, we were expecting an 8% sales growth for 2010," said Naamsa director Nico Vermeulen.

Naamsa has stressed that notwithstanding strong growth, sales growth numbers should be considered in the light of extremely depressed conditions in the new car market at the start of last year. 

Much of the recovery can be attributed to corporate fleet restocking, small gains in consumer confidence and rental car bulking up ahead of the FIFA World Cup.

- Fin24.com