South Africa Autos Industry Update Quarter 2 2012

  • April 2014
  • -
  • Business Monitor International
  • -
  • 73 pages

Includes 3 FREE quarterly updates

BMI is expecting significant growth in the South African auto market over the rest of 2012. We see revenues running around 19.9% growth, and within this, car revenues operating at 23.57% growth – bringing the figures to 686,456 overall and 491,531 for passenger vehicles. This pushes overall revenues towards the previous high of 2006, which saw overall revenues of 715,588 and 481,577 cars – meaning that this record figure has now been passed – indicative of a return of strength after the global financial crisis.
We expect 2013 to be the largest volume year in South Africa, with projected revenues of 809,304, which will represent both a 17.9% growth over the period, as well as equating to revenues of US Dollar 16.83bn. This revenues growth can be attributed to the low interest rate environment, as well as the constant introduction of new models with favourable offers by automakers, according to Chris de Kock, the head of revenues and industry ing at domestic vehicle financer WesBank.
February 2012 showed revenues growth which was commensurate with these facts, displaying 6.4% growth y-o-y, according to NAAMSA. This equates to 36,657 passenger units over the month, compared to 34,054 in 2011. The rental market is making up a growing proportion of new revenues, accounting for 10.5% of February revenues . This may be due to a rise in financing initiatives aimed specifically at this market, as it is potentially a steady volume and revenue stream.
The effect of flooding in Thailand has had trickle through effects on production in South Africa, Engineering News reported in late February 2012. The suppliers shutdown in Thailand ‘severely impacted’ the availability of imported components in the fourth quarter of 2011, which led to a slowdown of production, as well as a narrowing of the supply chain over the period – with effects on component cost. In addition to this upstream event, the breakdown of the Arcelor Mittal Newcastle steel furnace caused a rise in the price of steel available to the auto market, as it meant that it was essential for the market to import the commodity in order to maintain production.
2011 saw a record in the number of import revenues in the country, Engineering News reports. This view is supported by BMI’s models. 69% of all vehicles sold in the country were imported, up from 66% in 2010. This is part of a long term growth trend, which saw 9% of all vehicles being imported in 1995. This trend mirrors the production runs which are for export – with 51% of the 2011 production run being marked for export, compared to 30% in 2003. These two trends highlight a couple of crucial things about the SA market as a whole. One of them is a far deeper integration into the international production system, mainly due to South Africa’s chokepoint position as an access point into Africa as well as ease of entry to and from India and other sub continental areas, and access to international shipping routes.
Secondly, it demonstrates the growing sophistication of the production industry, and also the ease of doing business. It must be noted that the top three producers in the country are Toyota, Volkswagen and BMW – who produce 153,000, 137,000 and 52,908 respectively. The significant presence of these industry players in particular, three of the largest volume and value industry players in the world, strongly indicates a good relationship between government and the auto market .
These are also the three top three exporters, at 86,941 for Toyota, 81,169 for Volkswagen and 41,886 for BMW – showing the lure of the country as an assembly and export point. The top export industry s in 2011 were the US, with 65,000 CBU’s, the UK with 43,700 and Japan with 22,500 – a demonstration of high end production. Central government interest in developing local production facilities is also likely to act as a further boost to this practice, although the heavily import heavy revenues system may act as a downside risk to development unless checked in the next couple of years.

Table Of Contents

Executive Summary .. 5
Industry SWOT Analysis .... 7
South Africa Autos Industry Environment and Risk Analysis ... 7
South Africa Political Industry Environment and Risk Analysis ... 8
South Africa Economic Industry Environment and Risk Analysis . 8
South Africa Business Environment Industry Environment and Risk Analysis .. 9
World Overview . 10
Eurozone And EMs Pose Risks To 2012 Growth Outlook; US And Japan On The Rise .. 10
Data : Passenger Car Sales (Units), January-December 2011 .... 10
Regional Overview .. 14
BMI Highlights Its Favourite Opportunities In Sub-Saharan Africa . 14
Industry Risk/Reward Ratings ... 17
Data : Sub-Saharan Africa Autos Risk/Reward Ratings 17

Market Projection Scenario .. 21
Sales ... 21
Data : Sales, from 2009 to 2016 .. 21
Data : Production, from 2009 to 2016 ... 23
Data : Investments Made During H111 .... 26
Trade.. 27
Data :Trade, from 2009 to 2016 . 27
Macroeconomic Projection 30
Data : South Africa - Economic Activity ... 32

Competition Overview ... 33
Data : Top 10 Best Selling Passenger Car Brands in South Africa, August 2011 . 36
Commercial Vehicles .. 39
Data : Top 10 Best Selling Commercial Vehicle Brands in South Africa, September 2011 .. 41
Vehicle Parts 43
Alternative Fuel Technologies ... 45
Company Monitor ... 50
JLR Investment Targets Increased Buying Power .... 50
Company Profiles ... 52
Toyota South Africa .... 52
Mercedes-Benz South Africa . 54
MAN Truck And Bus (South Africa) 56
Volkswagen South Africa (VWSA) ... 57
General Motors South Africa (GMSA) . 59
Nissan South Africa 61
Ford Motor South Africa.. 62
BMI Methodology .... 64
How We Generate Our Projection ing Model .... 64
Sources ... 65

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