Industry takes stock of impact of vehicle sales slowdown

Stalled vehicle sales around the world will have a knock-on effect on the global freight and transport industry. Lower sales of new vehicles will hit the shipping industry as demand for containers of components drops, while ro-ro operators will have to change gear to meet changing demands. While October sales in South Africa were 34% down on last year’s number, the decline in the United States for the same month was 32%. South Africa is caught at the crossroads, warns the National Association of Automobile Manufacturers of South Africa (Naamsa). In his October assessment of new vehicle sales, director Nico Vermeulen says “the challenge facing South African component and vehicle exporters is how best to strategically position themselves between mature and emerging markets in the international automotive environment”. This is in the face of a predicted drop of between 10% and 15% of new vehicle exports in 2009, compared with 2008’s record 71% growth over 2007. Vermeulen said it was generally anticipated that the crisis in financial markets would result in an economic slowdown in the US and the European Union – both of which represented important markets for South African automotive exporters. “On the other hand, emerging markets such as China, India, Brazil, South Africa and others will still register growth.” China is expected to show a market growth of 6.7% over 2007, according to market researcher JD Power & Associates. On the plus side a decline of 10% to 15% would see 230 000 to 240 000 units exported in 2009, which Vermeulen described as “a very respectable total”. One bright spot is Canada, where passenger car sales for October were up 2.4%, the best they have been since 2002 when sales hit the 130 000 unit mark.