Motor assemblers to invest R5.9bn this year

ED RICHARDSON
SOUTH AFRICAN motor assemblers are expected to invest around R5.9-billion in capital expenditure this year, according to Nico Vermeulen, director of the National Association of Automobile Manufacturers of South Africa (Naamsa).
According to Vermeulen, the strengthening rand has skewed the figures in a trend of increasing investment in the local industry. “During 2004, the strong rand would have translated into lower costs of imported capital equipment (machinery/production technology),” he says.
The strong rand did, however, affect exports. “On the back of the strong rand and highly competitive global market conditions, the momentum of vehicle exports continued to soften throughout most of 2004.
“Aggregate industry vehicle exports during 2004 declined by 15 408 units or 12,2% to
111 253 units compared to the 126 661 vehicle exports in 2003. In revenue terms, vehicle exports during 2004 would have approximated R18,0 billion,” he says in Naamsa’s report for the fourth quarter of 2004.
Exports are, however, expected to grow again during 2005 as new programmes come on stream.
All the major OEMs and three truck manufacturers participated in the survey. Six manufacturers project increased capex for 2005, with one major OEM accounting for over half the industry’s projected investments.