9720 Autolive 86.Indd

15 000 SUBSCRIBERS www.autolive.co.za Issue No. 86 | 30 June 2016 SSIGNIFICANTIGNIFICANT LLOCALOCAL IIMPACTMPACT EEXPECTEDXPECTED FROMFROM BBREXITREXIT BY ROGER HOUGHTON are likely to be serious consequences arising from Dr. Johan van Zyl who now heads up Toyota the Leave voters’ decision. Europe. Toyota is among those companies with big Senior executives of British vehicle manu- plants in the UK, with others being BMW (build- Already there are massive repercussions for global facturing plants in the UK had warned about the ing MINI and Rolls-Royce), Volkswagen (Bentley), economies and fi nancial markets. Th e UK and EU potential risks associated with leaving the EU prior Tata (Jaguar and Land Rover), Honda and Nissan. are South Africa’s most important trading partners to the vote last Th ursday. in terms of vehicle and component exports so there Th ese voices included that of SA-born continued on page 2 The unexpected result of the Brexit poll in the United Kingdom will have a signiﬁ cant impact on the South African motor industry according to a number of local commentators and industry executives. Page 7 Page 13 Page 21 Africa’s automotive Are non-genuine parts Digitial is deﬁ ning future examined no good? the future Subscribe for free @ www.autolive.co.za Page 2 Editor and General Manager continued from previous page Liana Reiners [email protected] Ford has scaled down its opera- 083 407 4600 tions in the UK, but its three UK fac- tories are still an important source of Contributors major components such as engines and transmissions. Roger Houghton Th ere are also a number of niche [email protected] makers based in the UK such as 082 371 9097 Aston Martin, McLaren, Morgan Stuart Johnston and Lotus. A Nissan executive in Europe [email protected] said it was hard to believe that there 083 450 9255 was an overwhelming “Leave” vote in the Sunderland area where the Advertising Sales Nissan plant is situated and which Liana Reiners provides employment to many of the [email protected] local people. Another person to comment on 083 407 4600 If one considers that companies Brexit and the motor industry was such as UK-based Toyota sold 75% Jeff Osborne, former CEO of the Address of their 190 000 cars in EU member Retail Motor Industry organisation 237 Rigel Avenue countries last year, while only 10% (RMI) and now head of Gumtree were sold on UK home soil, one can Automotive. He said: “We don’t yet Waterkloof Ridge see why manufacturers are pressured know the infl uence Brexit will have Pretoria to preserve these trade agreements. on the motor industry, but automo- PO Box 914 005 In 2015, the UK exported 77% of the tive stocks on global stock markets Wingate Park 1.59-million vehicles manufactured were battered when the news broke. 0153 in the country, across all makes. Th is was likely due to investors exer- Before the poll it was generally cising caution and opting to observe NAAMSA director, 012 460 4448 mentioned that exports of UK-built the UK situation before making any Nico Vermeulen. vehicles would be hit by a 10% rash decisions. Th e eff ect is likely to Website duty when they went into the EU be a marked decline in share values “Vehicle and component exports www.autolive.co.za if the “Leave” vote succeeded. Th e in the short term.” from South Africa have been on the penalty will only become clear as Britain is an important market rise consistently over the last few Facebook negotiations between the UK and for built-up vehicle exports from SA, years, in some instances by 50%, www.facebook.com/pages/AutoLive EU progress, but the extreme case with the likes of Mercedes-Benz, bolstered by the weak rand and the © 2015 WCM Media CC could result in the closure of vehicle fi nancial recovery from northern manufacturing facilities in the UK as “Vehicle and hemisphere markets. It is crucial that Production is happening in Australia at present. component exports from trade agreements with Britain are According to a recent re- renegotiated to minimise economic Marketing Support Services South Africa have been +27 (0)12 346 2168 port by Roy Cokayne in Business impact,” added the Gumtree Head. [email protected] Report, NAAMSA’s director, Nico on the rise consistently Osborne says this is particularly Vermeulen, said that a lower GDP over the last few years, important as major African markets Disclaimer in the UK and EU will be refl ected in some instances increasingly move away from South in the demand for motor vehicles African imports. “As countries While reasonable precautions have by 50%, bolstered been taken to ensure the accuracy but this could be only a temporary such as Algeria’s policies on vehicle of the advice and information given phenomenon. by the weak rand.” imports tighten and Nigeria focuses to readers, neither the editor, the Vermeulen said a broad free on its own budding manufacturing proprietors, nor the publishers trade agreement governed trade be- Volkswagen, BMW and Ford ship- industry, South Africa is dependent can accept any responsibility for tween SA and the EU and SA would ping a total of 48 669 passenger and on Europe, while Angola’s loss of oil any damages or injury which may have to arrange a similar deal with light commercial vehicles to the UK revenue also cut government spend- arise therefrom. the UK going forward. last year. ing on imports signifi cantly.” ■ MONTHLY SALES STATISTICS The growing amount of advertising in AutoLive has made it necessary to relocate the four pages of detailed monthly vehicle sales analysis to the website www.autolive.co.za. CLICK HERE to access Subscribe for free @ www.autolive.co.za Page 3 Editor’s Note New Vehicle Sales Continue on a Downward Path Welcome to another issue BY ROGER HOUGHTON brand is in fact outselling long-established of AutoLive! And what a nameplates like Fiat and Subaru so far packed issue it is, bring- this year and is not far behind Peugeot ing you all the latest news Th e current situation regarding new vehicle Citroën SA. from our automotive and sales in South Africa makes for sad reading WesBank continues to stress the shift in related industries. because many of our country’s economic purchasing from new to used vehicles. As if we don’t have woes are self-infl icted and fanned by the Simphiwe Nghona, CEO of WesBank enough problems of our own, unstable political environment that is now Motor Retail, says that the weaker rand has it seems that Brexit will have a negative impact here in South leading to ongoing violence. Th is is a recipe resulted in continuing new car price infl ation Africa too. Th ose in the know are predicting serious impli- for disaster in terms of business and inves- and this is driving people to consider a qual- cations for the motor industry that could place additional tor confi dence and the motor industry is ity used car. WesBank says demand for used strain on already-faltering local vehicle sales. one of the fi rst sectors to suff er in times of cars rose by 9.5% in May. Used car prices are At the same time, Mike Whitfi eld (Managing direc- economic downturns. also rising and the average price for a used tor of Nissan South Africa, President of NAAMSA and Overall new vehicle sales in May were car fi nanced by WesBank was up 7% in May. Deputy President of AAAM) believes that the African 10.3% below the fi gure for the corre- WesBank’s forecast for 2016 still sees automotive industry is on the brink of a potentially bright sponding month last year at 42 907 units. total industry sales declining by 12% for the future. Provided, of course, that certain key challenges can Passenger car sales tumbled 12.3% and LCV year. Th is decline is being fuelled by upward be overcome. volumes fell 5.3% while sales of medium changes in the interest rate and higher cost In other news we look at the diff erences between origi- commercials dropped 13.1% but the heavy of living for consumers. Th is year the inter- nal, OEM and aft ermarket parts and why it matters. Th is truck and bus market slipped only 3%. est rate has already been hiked by 75 basis has always been a hotly debated issue which is now being Th e overall year-to-date situation is lit- points, while the petrol and diesel prices addressed by the Right to Repair initiative. tle better, with a fall of 9.8% in volume com- have risen by 7% and 12% respectively. At the same time retailers are being warned of the grow- pared to the January-May period in 2015. “Consumers currently in the market ing importance of digital communications systems in the Th ere was some good news for the deal- fi nd themselves either having to hold onto vehicle retailing environment in South Africa. Th e message ers however in that 90.5% of the sales went their cars for longer before replacing them is clear: people heading up local automotive businesses must through the retail channel, only 1% went with a new model or taking their budget to embrace change and adapt the way they run their compa- to the government, 3.3% to corporate fl eets the used car market,” explained Nghona. nies to ensure sustainability. Th e accelerating move to the and 5.2% to the rental industry.

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