Motor industry strike hits new cars

Stewart Jennings, president of the National Association of Automotive Component and Allied Manufacturers (Naacam), which represents component manufacturers, said on Friday that about 60% of its members were affected by the strike.

The industrial action, which began on September 1, involves employees working in garages, parts suppliers, workshops and dealerships.

Jennings said the labour action had made it difficult for parts suppliers to manufacture and noted that exports of vehicle parts and components were suffering.

Brand Pretorius, CEO of McCarthy, a division of diversified conglomerate Bidvest (BVT), said the consequences of the strike in the motor industry were getting severe.

McCarthy is one of the country's largest dealership networks, with 120 outlets.

Waiting list building up

Pretorius said the waiting list of popular new model ranges such as Polo Vivo, Toyota Hilux and Ford Figo was building up. As a result of the ongoing strike, South Africa's vehicle production lines have come to a virtual standstill.

Vehicle manufacturers - including Toyota SA, Ford SA, BMW SA, Nissan SA, General Motors SA and Mercedes-Benz SA - produce more than 2,100 cars per day in total. About 50% of these are destined for export markets and the balance is supplied to the domestic market.

Last month, vehicle manufacturers lost an estimated 17 000 units in the wake of the eight-day industrial action.

Absenteeism creates problems in parts sector

Pretorius said parts turnover is declining because panel shops McCarthy is supplying are not working, as there is high absenteeism due to the strike.

In isolated instances, Pretorius said replacement parts are starting to become a problem, meaning that more vehicles are stuck in the group's service centres.

Hubert Brody, CEO of Imperial Holdings (IPL), said in some cases, parts supply was constrained and the group was starting to run low on certain new cars.

Imperial has 250 dealers countrywide.

Buyers looking elsewhere

Brody said customers were starting to look for alternatives to new cars, switching to quality used cars.

Brody said that we expect to do brisk business in the used car market.

Sending stern warnings about the demonstration, Jennings said component manufacturers risked losing orders and may need to retrench people.

The industry action was concerning for the local component manufacturing industry, in particular, and South Africa, in general.

Given the tough competitive environment, the strike is making SA look like an unreliable supplier of parts.

There are plenty of components available internationally because parts producers still have spare capacity, which arose from the global financial and economic crisis that hurt demand for vehicles.

The strike comes shortly after the strike at state-owned transport and logistics group Transnet, industrial action in the vehicle manufacturing sector, and at a time when the rand is strong.

Jennings said he hoped the wage dispute was resolved soon and added that he was encouraged that wage negotiations were constructive.