Vehicle units exported expected to double in 2004-7 period ALAN PEAT THE FUTURE success of SA’s booming export trade in motor vehicles and components is highly dependent on what happens to the motor industry development programme (MIDP), which is currently under review, according to Norman Lamprecht, executive manager of the National Association of Automobile Manufacturers of SA (Naamsa) and head of its automotive industry export council (AIEC). “SA automotive exports only became significant from 1995,” he told FTW, “when the MIDP was implemented. This structural adjustment programme provided an incentive to export by enabling import duties to be reduced through export credits.” So the main challenge of the moment, he added, is basically the MIDP extension and policy certainty. “For the motor vehicle manufacturers to invest in new generation models and remain in SA they need attractive incentives and support under the MIDP in its current or new format,” Lamprecht said. “And, without the motor vehicle manufacturers (OEMs) there will probably be no component manufacturers, as they depend on the OEMs for business. “The strong rand and distance to markets are also generic challenges – but there’s not much that industry can do except to live with it.” So Naamsa and the other business stakeholders as well as government and labour are constructively pursuing an outcome that would be in the interests of the automotive industry in particular and the country in general. The present MIDP lasts until 2009, and Lamprecht suggested that the target date for the current review to have been dealt with by the ministers of trade and industry (DTI) and finance was the end of 2006 – after which it could be implemented by customs and excise. In the current situation, SA exports of vehicles and automotive components continue to surge as a result of improved commodity prices and competitiveness. In rand terms, vehicle and component export growth has averaged 28% annually from 1995 – with real annual volume growth averaging 38% on vehicles and 19% on components. But, given the strong exchange rate, Lamprecht expects industry exports to consolidate at current record levels when measured in rand income. In 2004, the industry exported 110 507 vehicle units, and is expected to hit a 2005 level of 143 400 once the year’s figures are finalised. Lamprecht forecasts a total of 205 500 for this year and an increase to 240 500 in 2007. That’s exports of vehicle units more than doubling in the 2004-07 period. “For component exports, meantime,” Lamprecht said, “we are projecting that the total will increase to R23bn for 2005 from the R21,7bn recorded in 2004.” SA assembled vehicles and manufactured automotive components are currently exported to 126 destinations globally. Overall Europe – and specifically Germany – remains the main trading partner, followed by Japan, the USA and the UK. “The end result of the AIEC activities will be to broaden the export base by bringing in more companies that export directly in their own right or by being suppliers to exporting companies,” said Lamprecht. “In addition, the objective will be to increase the value of exports of automotive products. “While this has shown rapid growth over the past few years, it is critically important to ensure that ongoing measures are in place to maintain the growth momentum,” said Lamprecht.
