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Johannesburg - The carbon emission tax on new vehicles has boosted car sales in August, as South Africans rushed to complete transactions before the introduction of the tax at the start of September.
Total new vehicle sales in August were 46 377, 36.9% higher than the same month in the previous year, according to the National Association of Automotive Manufacturers of South Africa (Naamsa).
August sales were also 12.17% higher than those in July 2010. Most impressive was the 49.6% year-on-year increase in passenger car sales during the month in review.
"This pre-emptive buying in August means that we could well see a decline in sales during the remainder of this year," said Naamsa director Nico Vermeulen.
The net effect of the carbon emission tax is expected to be a 2% to 3% increase in passenger vehicle prices. The tax has attracted a varied response from the industry, with some commentators saying this is just another way for the government to collect money.
Meanwhile, while Naamsa sees sales declining over the next few months, no reversal in the recovery made on last year is expected.
"Ultimately, the performance of the industry would remain a function of the direction of interest rates and the domestic economy as well as the performance of the global economy," said Naamsa in a statement on Thursday.
However, one other adverse factor that will hit the industry is a strike by members of the National Union of Metalworkers South Africa (Numsa), which kicked off this week.
Component workers - including those employed by tyre manufacturers - have stopped working and the production processes of South Africa's vehicle makers are already under pressure.
Volkswagen South Africa was forced to close its factory on Wednesday due to the industrial action. The remainder of local car makers are likely to follow suit on Monday, said Vermeulen.
Numsa, which represents 70 000 workers in the industry, is demanding a 15% wage hike, while employers are offering 6.6%. The strike is set to intensify on Friday, with an organised march taking place in Durban.
Supply to local dealerships may affect local sales, while Naamsa is concerned about exports.
"This strike undermines the already fragile reputation of South Africa as a reliable trading partner," said Vermeulen.
He added that prolonged strike action may also result in employment losses back home.
- Fin24.com