Vehicle market uncertainty

DRIVE ON: A vessel loads VWs, closest to the ship, for export in the Port Elizabeth harbour. Picture: EUGENE COETZEE
DRIVE ON: A vessel loads VWs, closest to the ship, for export in the Port Elizabeth harbour. Picture: EUGENE COETZEE

NELSON Mandela Bay’s vehicle industry is showing signs of recovery after the devastating strike last year.

The protracted seven- week strike during the last quarter of the year had a massive impact on South Africa’s vehicle industry, coupled with overall slow economic conditions.

But the metro’s vehicle manufacturers are reporting definite signs of recovery.

In spite of the challenging trading conditions in the first three months of the year, Volkswagen Group SA (VWSA) maintained its market leadership position in the passenger car segment with total sales of 26127 units and market share of 23.9%, VWSA sales and marketing director Petra Hoffmann said.

“The passenger car market in the first quarter has set the tone of the challenges that lie ahead for the remainder of the year.

“The trading conditions will continue to be impacted by the weak exchange rate, pressure on household income and subdued consumer confidence.

“Our outlook is that the passenger car market will be down by at least 4% in 2014 compared to last year.

“We, however, remain positive that our brands will be resolute in withstanding the prevailing challenges,” Hoffmann said.

The Polo Vivo (8049) and Polo (7590), which are manufactured at VWSA in Uitenhage, were the top-selling models in the SA passenger car market in the first three months of the year.

The launch of the Golf R in February boosted the sales of the Golf in the first quarter to 2301 units.

General Motors SA (GMSA) experienced a 5% sales increase in the first quarter, with 766 more units sold than during the same period last year. This is despite the industry sales declining overall by more than 5000 vehicles in the first quarter of the year, from 165345 last year to 160342 this year.

GMSA vehicle sales, service and marketing vice president Brian Olson said despite the year-on-year vehicle sales decline, GMSA had increased its sales.

“We are very pleased with our performance and expect to see the trend continue for the rest of the year.”

Chevrolet and Isuzu light commercial vehicle sales were strong with the Spark Pronto up 10% compared to a year ago, and Isuzu up 22% against the same period last year.

National Association of Automobile Manufacturers of SA (Naamsa) director Nico Vermeulen said vehicle sales held up reasonably well last month and were virtually unchanged from the aggregate sales of the corresponding month last year.

The consumer-driven new car segment had recorded a year-on-year decline of 2.2%, while the commercial vehicle segment – which was sensitive to investment trends – had gained.

“Industry new vehicle exports during March at 24660 vehicles registered a decline of 3122 units, or a fall of 11.2% compared to the 27782 vehicles exported in March last year.

“From the middle of 2014, the momentum of industry vehicle exports should pick up substantially on the back of the commencement of the Mercedes-Benz C-Class export programme,” Vermeulen said.

Prospects for the balance of the year would continue to be affected by the subdued economic growth in the country, with domestic sales anticipated to remain flat. They might even show modest declines compared to last year, he said.

“Exports, however, should benefit from improving global economic conditions and, barring domestic supply disruptions, could well show strong growth during the second half of 2014, particularly in respect to vehicle exports to Asia, Africa and Europe,” Vermeulen said.

Meanwhile, the worldwide Volkswagen Group started the first quarter strongly with the delivery of 2.4 million vehicles.

Last month, the group delivered 929500 vehicles, which was 7.6% units more than in March the previous year.

VW Group board member for sales Christian Klingler said the positive momentum in the Asia-Pacific region continued.

China remained the group’s largest single market, he said. – Cindy Preller

 

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