Weakening local demand offset by exports
Within the next
two years,
global vehicle
sales will pass
the magical 100 million mark
and continue to rise until the
end of this decade, on the
back of increasing demand in
emerging markets like China.
That’s the bullish prediction
of the 2015 KPMG Global
Automotive Executive Survey.
With the globalisation of
the automotive market South
Africa has the opportunity to
be part of that growth – if the
country remains competitive
and is making the cars that
people want to buy.
In South Africa, original
equipment manufacturers will
invest a record R7.49bn in the
industry this year, according
to the August quarterly report
of the National Association of
Automobile Manufacturers of
South Africa (Naamsa).
Weakening local demand is
being offset by exports, which
will help accelerate production
to a record
609 000 vehicles in 2015.
Global automotive
executives who took part in
the survey are expecting to
see growth in the budget car
segment due to affordability in
developing countries.
Developing countries are
the focus for growth because
the demand for vehicles is
shrinking in Europe.
A big “success story” is the
growth of the motor assembly
industry in the former Eastern
European states and China.
In 2015, China is expected
to account for around 30%
of global passenger car sales,
representing 400% growth in
less than 10 years.
Over the same period
however, car production across
Europe has halved from 43%
to 21%.
Italy, France and Belgium
have been most severely
impacted, with “marginal
decline” in the United
Kingdom and Spain and little
change in Germany.
According to Karel
Stransky, director EMEA
corporate solutions at Colliers
International, Slovakia, the
Czech Republic and Romania
are among the fastest-growing
markets.
But, across the Atlantic,
the automotive sector in the
United States is fast shifting
gears.
So much so that it is having
an effect on ports in the
country.
Los Angeles, Long Beach
(California) and the ports of
New York and New Jersey
have seen volumes drop in
the face of an increase in local
production at the expense of
imports from Japan, South
Korea and Europe, according
to an annual survey by
Automotive Logistics.
These ports are being
overtaken by Baltimore
(Maryland), Brunswick
(Georgia) and Jacksonville
(Florida) which are both
exporting American-made
cars and handling larger
volumes out of Mexico.
CAPTION
Polo 250s lined up awaiting export through Port Elizabeth.
