TFR angling for a big slice of automotive business

Transnet Freight Rail
(TFR) expects to transport
approximately 185 000
import, export and domestic
automotive fully built units
in 2012.
This is according to Thabo
Malatsi, senior accounts
executive: automotive for
TFR.
“Following the doubledigit
growth in vehicle
sales recorded last year, the
outlook for South Africa’s
automotive sector continues
to remain positive at the start
of 2012, with confidence
levels among dealers
increasing for the first three
months of the year,” said
Malatsi.
According to results
from the latest WesBank
Vehicle sales Confidence
Indicator (WVsCI)* for the
first quarter of 2012, overall
confidence levels in sales
activity amongst dealers
increased to 6.4 out of 10
compared to 6.1 in the final
quarter of 2011. This increase
in confidence levels amongst
the dealers indicates that the
high sales activity within
the sector in 2011 appears to
have continued in 2012.
According to Naamsa, the
local vehicle sales market has
shown unexpected growth
at the start of the New Year,
with total industry vehicle
sales increasing by 8.8%
year-on-year compared with
the same period in 2011.
With local production
figures also set to increase, it
is a market sector that offers
considerable opportunity.
While Naamsa warns that
the industry’s future export
performance depends on the
direction the stressed global
economy will take in 2012,
expectations for the most part
remain highly positive.
“Total industry exports
are projected to reach about
320 000 units during 2012,
while the domestic market
is expected to grow by 7%
(611 500) units in 2012,
based on the assumption
that the economy will grow
in real terms by between
3% and 3.5%,” said Malatsi.
“Therefore, our domestic
production by the locally
based OEM is expected to
increase by 13% from
540 500 in 2011 to 610 000 in
2012. This is in line with the
industry’s ambitious target
of producing 1.2 million
vehicles in 2020.”
This bodes extremely well
for TFR, he said, as this can
be translated into a 29%
increase in rail business since
the organisation is aiming
to rail 186 700 in 2012 from
145 000 units which then
improves its market share
to 42%. “This will be a
quantum leap on our current
market share,” said Malatsi.
“Of a potential rail market
of 439 785 units, our target
is around 186 700, which
we are planning to achieve
despite the challenges we
face.”
Some of these challenges
when dealing with the
automotive industry include
the availability of specialised
and dedicated rail wagons
that can increase flexibility,
limited rolling stock capacity
and ever-changing car
designs that make these
units no longer suitable
for TFR’s fixed wagon
envelope. Additional issues
are unpredictable market
demand and unprecedented
industry growth that far
exceeds planned rail capacity
investment funding.
But, said Malatsi,
there’s immediate market
opportunity that rail can
capture without major capital
investment and that is the
conversion of current short
haul road export traffic to the
port from the coastal-based
OEMs to rail.
“This will decongest the
metropolitan roads, thus
reducing traffic and carbon
emission as well as lowering
the transport logistics costs
which will make our export
units globally competitive.”