The South African economy may have suffered a downturn in the first quarter of 2019, but the vehicle export market shows considerable growth. The National Association of Automobile Manufacturers of South Africa (Naamsa) released a statement that says that vehicle export sales reached 11 571 units – a 54% growth from 2018.
The same report also highlights that aggregate domestic vehicle sales also grew by just under 1% from 2018. Naamsa predicts that the growth of the vehicle export market will continue into the second half of 2019. Vehicle export sales could possibly reach 400 000 units by the end of the year – this figure stood at just over 351 000 at the end of 2018.
The demand for South African vehicles and automotive components is strong, especially in regions such as East Africa, South America and Asia. However, the domestic market for new vehicles is more subdued under the current economic conditions. The ABSA Purchasing Manager’s Index decreased from 47.2 points in April to 45.4 points in May 2019. This means that the local buying power has taken a knock.
“Consumer and business confidence levels are low, household disposable income remains under pressure, owing to rising costs of living, and lower domestic and global economic growth forecasts continue to signal moderation in new-vehicle sales,” says the Naamsa report.
“However, in anticipation of an improved economic growth rate for the year compared to 2018, albeit modest, a better second-half performance in terms of new vehicle sales is still expected,” suggests Naamsa.
Despite this, the upward momentum of the export market will drive the automotive manufacturing industry in South Africa over the coming months. Naamsa has also noted that the local vehicle production volumes will continue to benefit from the growing export sales.
Formex Industries is a metal forming and assembly company that supplies a variety of complex products to the local automotive industry and export market. The company is based in the Nelson Mandela Bay metropole, South Africa’s foremost region for automotive manufacturing and export.
Formex specialises in producing components for the catalytic converter industry, as well as metal components and assemblies for the various vehicles. Formex aims to become one of the foremost suppliers for the South African automotive industry by 2035, aligning itself with the South African Automotive Masterplan (SAAM) which takes effect in 2020.
Formex is a Level 2 B-BBEE supplier with over 80% black ownership, of which more than 40% are black women. The company is owned by Deneb Investments Limited – a subsidiary of Hosken Consolidated Investments Limited (HCI) – one of South Africa’s biggest true B-BBEE companies listed on the Johannesburg Stock Exchange (JSE).