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Let's all build on
the positives
The latest sales figures released by the National Association of Automobile Manufacturers of SA (NAAMSA) are cause for great joy and celebration - and this especially on the heavy truck side of the market.
Total sales of heavies during October was 774, an increase of 107 units - or 16,8% up on the 647 units sold last month. That's a massive increase which, according to NAAMSA, represents the highest monthly sales recorded in over five years. These totals include buses so if one takes out the buses, you have 629 trucks sold in October against 483 in September. Interesting is that bus sales declined from 164 in September to 116 in October but those figures will still be welcomed by bus suppliers who suffered many years of dismal sales.
In the medium commercial vehicle arena, sales were also up - although not as dramatically - from 423 in September to 506 in October. That's still a most welcomed upward movement. Light commercial vehicles - bakkies - also recorded gains from 8 642 in September to 10 879 in October. That's a hefty 25,9% increase. And for those of you interested in the little 'uns, passenger car sales rose from 19 459 units in September to 21 735 in October - an 11,7% gain.
All this comes as exceptionally good news in the wake of the awful onslaught of bad news we have faced since September 11th. On that day, the world was thrown upside down and no-one knew where they heck we were going. Well, based on the latest vehicle sales, South Africa is going forward and let's keep it that way. Commenting on the October sales figures, NAAMSA says: "Sales of commercial vehicles collectively in recent months suggests continued improvement in fixed investment sentiment in the country." Let's build on that.
On this point, I was involved in a conversion with someone around the September 11th attacks and he was talking doom and gloom stuff. I retorted that if we let this economy crash - and if other countries let their economies crash as a result of that awful incident - that will be the ultimate victory for Osama bin Laden. Already we have seen thousands of retrenchments following the attacks. We cannot let our economies flounder but must throw everything we have into building them. It would help, of course, if the jelly-fish brigade of stock market brokers displayed a little bit of guts and vision by not causing panic selling on the world markets. It's amazing how they run from every crisis - and even perceived crisis. "But they're protecting their clients' investments," is what they'll tell us. Yeah sure - and the right way to do that is to crash markets instead of hanging in there to send a message of strength from the investment community rather than one of lame weakness! September 11th was one crisis where I really thought we would see the investment community hanging in there in solidarity with all Americans. But alas. I was wrong and will no doubt be labeled a naïve dreamer and idealist for that thought?
With this in mind, I attended the launch of the new range of Isuzu trucks and during his presentation, Ian Nicholls, director sales and marketing for Delta Motor Corporation, spelt out some of the negatives South Africa is facing. Note, he was not being negative. Rather, he was being realistic regarding some of the challenges facing the economy. I approached him afterwards with a FleetWatch challenge. "I have heard those negatives, now I challenge you to think of ten positives and let me have them." He took me up on the challenge and here are what he terms his "10 very good reasons to be positive about the outlook for the SA economy and indirectly, the auto industry:
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Recent cuts and anticipated future cuts in personal income tax will generate higher disposable income for lower and middle income households.
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The government is planning - and indeed has started - with a programme of significantly increased spending on infrastructural and social projects.
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Currently we have nominally the lowest interest rates since the late 1980s when prime was at 12%.
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The focus of corporate South Africa on outsourcing will continue to create a large number of new SMMEs . These enterprises, together with the growing informal sector, generate income for individuals on a small scale and as the enterprises grow, eventually meaningful long-term employment.
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South Africa's tourism potential is huge in the international market. The Tourism Board initiatives such as the "Circle of Sunshine" continue to elevate the awareness of South Africa as a tourist destination. Tourism has a massive potential for developing jobs as well as indirectly
creating vehicle demand via rental companies , etc.
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As the Rand has declined, South African exports have become much more competitive in dollar terms which should lead to continued export growth.
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The shortage of certain key skills in the South African market (technical, financial, IT, etc) will be addressed as the government's more liberalised immigration policy comes into effect.
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The Rand earnings of South Africa's mining industry is escalating dramatically as the Dollar has strengthened against the Rand. These increased earnings protect employment in both the gold and platinum mining sectors and also result in increased spending by the major mining houses.
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Agriculture appears well set for a bumper season in South Africa. Good early summer rains in the major growing areas of the Free State have increased the likelihood of a record maize and wheat harvest.
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Nelson Mandela
So there you have it. Thank you Ian for that and we now extend this FleetWatch challenge to all our readers. Write your own list of positives and let us have them so we can publish them and in that way, get this industry talking things up rather than down. The danger in South Africa for so many years has been that people are quick to talk things down. Let's not ignore the negatives - I still think the government has failed dismally in tackling one of the country's worst negatives, namely, crime - but let's also look on the bright side. Give it a go. We need it.
Patrick O'Leary
Managing Editor
FleetWatch
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