New vehicle sales are continuing to decline, but motor manufacturers are not that concerned as rising exports sales of fully built-up cars are keeping them afloat.

In the first four months of the year, new car sales were down 15.4 percent and light commercials were down 6.5 percent.

Sales of medium and heavy commercials, however, were 27.7 percent better.

Without the fillip from infrastructure projects and exports, the slide could threaten jobs in an industry that employs close to 260 000 people in car and component manufacture.

All vehicle manufacturers, however, are benefiting from increased exports of cars and light commercials and this, in turn, is keeping all the component manufactures busy.

The National Association of Automobile Manufacturers of SA (Naamsa) reported this week that in the first four months of this year exports had increased 45.5 percent.

Export contracts

Toyota expects to export 147 000 Corollas and Hilux vehicles this year to various countries, while Ford with its facility in Port Elizabeth exports well over 200 000 engines a year and this week announced that it had been awarded a contract for the rest of Africa to export the Ford Ranger bakkie.

It is expected that 10 000 Rangers will be exported this year, 24 000 next year and 40 000 by 2010, which will take its export programme up to 60 000 units a year.

BMW and Mercedes-Benz also have large export orders for the 3-series and the C-Class respectively. Volkswagen also announced this week that it would export a record 40 000 vehicles this year including a new export order for 10 260 fifth-generation Jettas to Australia, New Zealand, Japan, Ireland and the UK. This is in addition to the export of 21 000 fifth generation Golfs and 8800 Polos.

"This additional export contract is particularly welcomed during a period when volumes in the domestic market are under pressure from macroeconomic factors well-known to us all,"said Volkswagen SA Chief Executive David Powels.

Volkswagen will produce 100 000 vehicles at its plant in Uitenhage this year, of which 40 percent will be exported. By the end of June Volkswagen will have exported 350 000 vehicles to various parts of the world.

Price increases, however, have been dependent on the level of imports by each manufacturer. Toyota increased prices for the first time this year by between 1.6 percent and 2.5 percent. Since April last year, Toyota increased prices by just over 4.8 percent, but is unable to suggest what might happen during the rest of the year.

A spokesperson for BMW said that prices were raised in February and April.

The average April increase was between two percent and four percent.

Renault lifted prices by 2.3 percent on average in January and by 3.1 percent in May. Like other importers, Renault is subject to exchange rate movements in order to maintain its competitiveness and profitability. Should the exchange rate worsen, there could be another increase this year.

Fiat increased prices by two percent in March and by a further two percent in April, while light commercials were up 1.6 percent over the same period. Some models were not affected by price hikes. Importers who source from Japan and Korea are not particularly badly affected.

The Fiat Estrada, which is imported from Brazil, has faced a pricing problem , but Fiat has absorbed most of the cost increase.

Fiat future looking good

For the year ahead, a Fiat spokesperson said that the future "was looking good" as the rand appeared to have stabilised against most currencies, and it was likely that prices might likely have stabilised in a similar fashion.

Mercedes-Benz lifted prices between three and four percent on average in April. The price rise since the beginning of the year has been between three and four percent.

"Due to the weakening of the rand and the fluctuation of the exchange rate, we had to increase our price structure," said Kostas Tsiknas, director of sales and marketing. It is highly possible we will have further increases this year, he said.

Volkswagen raised prices by between 1.5 percent and two percent earlier this month except on the Citi Golf after a rise of 1.5 percent in January. A spokesperson said that input costs such as steel had risen sharply, but the last thing the company wanted to do was raise prices higher than inflation.

General Motors increased prices by up to four percent on 10 March and by a further rise of up to eight percent depending on model. A spokesperson said that if exchange rates deteriorated further, increases would be unavoidable.

Business Times