New vehicle sales last year were more than double the sales figure for 1999, the president of the National Association of Automobile Manufacturers of SA, Johan van Zyl, said that this growth is truly phenomenal by any standard, anywhere in the world.

Van Zyl said that the domestic new vehicle market was under pressure, but it was not "all doom and gloom". Booming exports would support vehicle and component manufacturing operations and would assist in reducing the industry deficit, he said. "Industry exports of South African produced motor vehicles are expected to reach a record 300.000 units this year," said Van Zyl.

He said the industry exports of SA produced motor vehicles is expected to reach a record 300,000 units this year which together with vehicles produced for the local market will translate into record industry production for 2008 of over 600,0000 units. “The domestic market is under pressure, but exports are booming. This will support vehicle and component manufacturing operations, assist in reducing the industry deficit and should increase the industry’s contribution to SA’s GDP,” he said.
 
As far as the South African domestic market is concerned, it is not all doom and gloom. Van Zyl said admittedly both the economy and total vehicle sales are retreating from unprecedented highs when they were almost overheating in fact but the cloud does have a silver lining and the motor industry remains a very strong component of the overall economy. “It is interesting to note that total sales last year were more than double the figure for 1999 only eight years previously,” he said.

This growth is dispte the 2008, being affected by the high interest rate environment, record high levels of household debt, rising inflation and volatile and increasingly vulnerable international financial markets. Consumers and businesses are facing a higher cost base in 2008 which in turn have dampen their ability to spend on new cars. This is also as a result of vehicle manufacturers and importers having continued to face significant rising cost pressures as a result of domestic inflation and, more recently, substantial exchange rate weakness.  To the extent that increased costs are recovered through vehicle pricing, vehicle affordability is likely to deteriorate during this year. 

Van Zyl said world wide, poor air quality is related to approximately three million deaths each year and contributes to the plight of millions more around the world who suffer from asthma, chronic obstructive pulmonary disease, cardiovascular disease, and lung cancer. “The growth in urban travel, so apparent in SA at this time, will further exacerbate this problem unless steps are taken to reduce emissions. Vehicles, both petrol and diesel, emit significant quantities of nitrogen oxides, sulphur oxides, particles, carbon monoxide and hydrocarbons. “These pollutants can be reduced by adopting lower sulphur and lead free fuels and at the same time integrating this with the introduction of new vehicle technology and emission control devices,” he said.

NAAMSA was instrumental in persuading government and the fuel industry to phase-out leaded petrol in South Africa from the beginning of 2006. The phase-out of leaded fuel, primarily for health and environmental reasons, coincided with the introduction of a new octane structure for unleaded and lead replacement fuel in South Africa. 

This resulted in the introduction of a 95 octane unleaded petrol in South Africa’s inland areas together with a 93 octane unleaded as well as a lead replacement fuel.  This was consistent with international trends which legislated 95 octane fuel as the primary unleaded petrol grade to provide an optimum balance between the increased refining requirements of oil companies and the significantly improved fuel efficiency of modern, high technology vehicles.


Keywords: south-africa business