Motor industry loses thousands of jobs in 2008

The motor manufacturing industry lost 2 566 jobs in 2008, the National Association of Automobile Manufacturers of South Africa (Naamsa) said on Wednesday.

In the fourth quarter of 2008, aggregate industry employment declined by 723 jobs compared to the third quarter.

At the end of the third quarter of 2008, there were 35 686 positions, compared to 34 963 jobs at the end of the fourth quarter.

This emerged from Naamsa’s quarterly review of business conditions for the motor vehicle manufacturing industry during the fourth quarter of 2008.

During the fourth quarter, one company increased its headcount, two major employers reduced the number of employees, while employment at the industry’s other major employers remained stable, Naamsa said.

On a quarterly basis, sales of new cars, light, medium, and heavy commercial vehicles recorded sharp declines compared to the corresponding three months of 2007 with the negative momentum, in terms of sales, accelerating in all sectors.

Naamsa said 2009 was expected to be an extremely difficult year for the entire South African automotive industry.

“All sectors of the South African automotive industry—retail, auto parts manufacturing, and vehicle production—are experiencing severe and unprecedented viability challenges.”

The operating environment in all three sectors of the industry, during the first few months of 2009, had continued to deteriorate substantially.

It was only expected to show a modest improvement domestically, during the second half of 2009 and internationally, once the severe global financial and economic crisis had dissipated.

Improvement in the domestic environment depended on a revival in consumer spending, lower inflation, aggressive interest rate reduction, and fiscal stimulation, Naamsa said.

“Internationally, given the magnitude and severity of the financial/economic crisis, any improvement is dependent on a return of confidence and the stabilisation of financial institutions and markets ... this is only likely to occur in 2010.”

The aggregate domestic new vehicle market was anticipated to decline during 2009 to less than 450 000 units from the 533 387 new vehicles sold in 2008—a fall of 16%.

Production for the domestic market was anticipated to fall by 16,5%, while production for export markets was projected to decline by about 35% in volume terms.

The projected net effect was a loss of production of about 147 500 vehicles or a fall of 26% to 415 500 units from the 562 965 vehicles produced in 2008.

“Overall, domestic sales and production in 2009 are likely to fall to their lowest levels in the past seven years,” Naamsa said.—Sapa


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