South Africa’s automotive sector capital expenditure is projected to rise to R8.2 billion ($615 million) this year from R6.4 billion in 2016, the auto industry body said in a document seen by Reuters.
The National Association of Automobile Manufacturers of South Africa (NAAMSA) said in a memo dated 07th February that the sector’s estimated capex was based on details supplied by seven major car makers and data from various sources relevant to Beijing Automotive International Corporation.
Car manufacturers in South Africa include Ford, Volkswagen, Mercedes Benz SA, Nissan and Toyota, among others.
The automotive sector, South Africa’s largest manufacturing industry, expects a slight increase in new vehicles sales this year as economic growth gains pace thanks to commodity price rises and a recovery in farming.
The news follows last week’s report that revealed vehicle sales in the country ended 2016 on a weak note with figures for December 2016 at 41,639 units, recording a decline of 7,519 vehicles or a fall of 15.3% compared to the same period in 2015.
The slowdown in the domestic economy, above average new vehicle inflationary pressures, increases in interest rates, pressure on consumers’ and household disposable income and low levels of consumer confidence had contributed to a double digit decline in annual domestic sales volumes.