Speaking at the opening of the Durban Motor Show he said that the country was currently "in an upward phase of a gloom cycle" and although times were tough he expected the market to return to growth in 2009.

Pretorius said the local economy had been hit by a string of "perfect storms" simultaneously that had slowed sales:

• Global slowdown - particularly in the trend-setting United States.
• Local political and economic concerns
• Rolling electricity black-outs
• Slowdown in foreign investment
• Imposition of National Credit Act
• Higher interest rate - increased to 11,5 per cent last week
• Rand depreciation
• High inflation
• Pressure on disposable income
• High levels of household debt.

The result of these factors has been a decline in business and consumer confidence, which has impacted negatively on vehicle sales, particularly sales of passenger cars.

However, Pretorius does not see a serious slump, with overall South African vehicle sales (including non-reporters) expected to be down by 10 per cent this year, compared to 2007. This would see total sales of 611 000 units, with passenger car sales down 12 per cent to 380 000, light commercial vehicle sales falling 7 per cent to 190 000, while he expects medium commercials to continue to grow (up by 9 per cent this year to 16 500 units) and this growth to be even stronger in the heavy truck and bus segment (up 12 per cent to 24 500 units).

The CEO of McCarthy Ltd. believes the slowdown in sales will pass in the medium term, when a number of positive factors come into play:

• Massive capital investment - Accelerated and Shared Growth Initiative (ASGI) which involves government investments of R485bn by 2014
• 2010 Soccer World Cup
• Commodity boom - gold, platinum and coal.
• Emerging black market
• Growth in tourism
• Excellent agricultural season
• Personal income tax cuts - R7,2bn in 2008/9 fiscal year.

Pretorius stressed the fact that even at the forecast of 611 000 total sales for 2008 this is still more than double the 1999 figure of 295 775 units and not far off the 2005 total of 618 157 units sold.

He added that there is a lot the South African motor industry has to be grateful for at this time, particularly the fact that record built-up vehicle exports - forecast at 285 000 for 2008 - will boost local vehicle production to an all time high of about 629 000 units. By comparison, exports last year did not total even 180 000 units.

As was to be expected, Pretorius, who lives in Durban, where McCarthy has its head office and was speaking at the launch of the largest regional motor show in the in Durban, was full of praise for the motor industry in KwaZulu-Natal.

He admitted that the motor retailers in the region were taking a lot of strain, but in contrast Toyota's production was booming - going from about 75 000 units in 2003 to a projected 215 000 units this year - and there was strong growth in the local component manufacturing industry.

Pretorius said there were about 50 component suppliers in the greater Durban area, employing 15 540 people and having a combined annual turnover of R11,7bn. Total motor industry employment in KZN, including the retail sector, totals 50 000 people

Two other vehicle manufacturers in KZN are benefiting from the boom in truck and bus sales in the form of Volvo Trucks and MAN Truck and Bus, both based in Pinetown.

This significant growth in output by the motor industry is resulting in substantial improvements being made or planned for the local infrastructure.

One of these is Transnet's expansions at the Durban port and vehicle terminal, as well as the purchase of new rolling stock - all adding up to about R495million.

Transnet is also widening and deepening the entrance to the harbour.

Previously port capacity in Durban consisted of one berth and 6 500 parking bays. Now this has grown to three berths and 14 000 parking bays, allowing for the car terminal to be able to handle 500 000 units a year. (Last year the harbour handled 424 349 vehicles that were either imported or exported).

In addition to this, the Durban container terminal is undergoing an R11bn upgrade as part of Transnet's R78bn national capex programme.

Pretorius concluded his address by saying the current downturn in vehicle sales was, hopefully, only a blip before growth continues.