Export growth could protect downturn in local demand

WHILE THE local automotive industry has taken a knock in recent months with higher interest rates and the National Credit Act squeezing consumer spending capacity, it’s not necessarily bad news for carriers. “We could see a cooling off of local demand but the automotive industry is looking at increasing exports, which means import volumes will also need to grow – so one would hope that southbound volumes will continue to be strong, even if it’s not for the local market,” Safmarine’s Africa region executive, Alan Jones, told FTW. “A lot of automotive manufacturers are breaking into new export markets in different parts of the world and we would like to capitalise on that growth. “We continue to carry a high percentage of CKD (completely knocked down) units as well as cars in containers – thanks to our close relationship with the industry. We are hopeful that the downturn in local demand will be protected by increased export demand.” Jones is heartened by President Thabo Mbeki’s recent announcement of an extension of the Motor Industry Development Programme. “For us it’s critical, and from a jobs point of view the country needs the automotive business to be booming.” But the local auto industry is facing an additional threat from Asia and India. “Industry-wide, there’s been a dramatic increase in the import of Chinese and Indian cars – in the order of a 300% volume growth in 12 months,” says Jones. From a carrier perspective, however, this opens up new opportunities.