New vehicle sector revs up jobs

DESPITE lacklustre recent new vehicle sales growth, employment levels in the local new vehicle manufacturing industry have increased for the second consecutive quarter.

Employment by the industry grew by 1.8 percent, or 542 jobs, in the first quarter of this year following the 1 478 jobs created in the fourth quarter of last year.

This follows the more than 850 jobs lost between the second and third quarter last year.

There were 31 008 people employed in the vehicle manufacturing industry at the end of March this year compared with 30 466 at the end of December and 29 904 at end-March last year, according to the latest National Association of Automobile Manufacturers of South Africa (Naamsa) quarterly review of business conditions in the vehicle manufacturing industry for the first quarter of this year.

Anticipated growth

Nico Vermeulen, the director of Naamsa, said the further increase in headcount was related to higher levels of vehicle production and anticipated growth in output this year.

The increase in employment appears to be driven by expectations of strong growth in vehicles sales into export markets rather than the domestic market.

The outlook for this year remained one of marginal volume growth of about 2 percent in domestic sales.

This was principally based on projections of an improvement in South Africa’s economic growth rate to about 2 percent and anticipated relative stability in automotive industry industrial relations, moderating consumer price inflation and stable interest rates and credit ratings.

“A major negative factor” revolved around the security and stability in electricity supply and its impact on the economy, he said

Naamsa has revised down- wards its forecast of total vehicle sales into the domestic market this year by 1.78 percent to 659 000 units from its forecast in the fourth quarter last year of 671 000 unit sales this year.

Despite the downward revision, the industry will register its best domestic sales year since the 676 108 units sold in 2007 if it achieves this forecast.

The downward revision in total domestic new vehicle sales resulted from projected new car sales being revised to 445 000 units from the forecast in the fourth quarter for this year of 455 000 units, with total industry car imports now expected to total 315 000 units instead of 325 000 units.