MOTOR INDUSTRY TO INVEST R5,7 BILLION IN 2007
The South African motor industry plans to invest R5,8 billion this year, compared to the record R6,2 billion invested last year. The R5,8 billion is the second highest annual investment by the industry in history.

The investment is made up of R4,7 billion in new product, local content, export investment and new or upgraded production facilities, with a further R576 million for land and buildings and R435 million for support infrastructure such as IT, research and development and technical.

The figure for this year may increase as information on capital expenditure from a number of specialist truck manufacturers is still awaited by Naamsa.

ISUZU MOTORS JAPAN PRESIDENT VISITS SA
On his recent visit to South Africa, Isuzu Motors Japan president Yoshinori Ida spoke about the growing relationship between Isuzu and General Motors SA.

“The South African market has experienced phenomenal growth these past few years and we want to be part of this growth,” said Ida. “We believe that our product range is well suited to the requirements of South African consumers.”

Malcolm Gauld, sales and marketing director for GMSA, said that the PE-based company wanted to continue the solid relationship it had with Isuzu and assess opportunities to further grow the brand’s presence in South Africa.

Over the past few years, General Motors and Isuzu Motors Limited have successfully collaborated on a midsize pickup truck assembly and distribution in Asia Pacific, Latin America, Africa, and the Middle East.

During the next couple of years, Isuzu and GM will continue their collaborations and import vehicles they think will do well n the South African market.

MULTINATIONALS LOOK TO EQUITY EQUIVALENT PROGRAMME
Multi-national motor manufacturers are investigating the creation of a joint skills development initiative in terms of the equity equivalent programme provision now available to them in terms of government legislation relating to broad-based black economic empowerment.

The manufacturers had decided against establishing a BEE charter for the industry, but will now adopt the generic scorecard.

BRIDGESTONE RECEIVES TOYOTA ACCOLADE
Toyota SA has named Bridgestone SA its Supplier of the Year for a second successive year. According to the Prospecton-based manufacturer’s Logistics Department, the tyre manufacturer excelled in delivery performance, packaging, adherence to agreed pack quantities, transport, and response to kanban or schedule changes.

“We are very proud of this recognition by Toyota of our performance as a supplier,” said Yasuhiro Ito, Bridgestone South Africa’s chairman and chief executive. “It is particularly satisfying to be recognised two years in succession.”

CHINESE FAIL CRASH TEST
A Chinese car intended for sale in Europe has failed a benchmark German crash test. The Brilliance BS6 saloon gained only one star out of a possible five in a test carried out in terms of the Euro NAP regulations.

This was the second time in less than two years that a Chinese-made vehicle had failed the test, with the first having been the Jiangling Motors’ Landwind sports utility vehicle. It failed to score even one star.

HYUNDAI TOPS TOYOTA
For the first time ever, Hyundai has produced the most category leaders on the Strategic Vision’s Total Quality Index, leading in three segments. Hyundai’s sister company, Kia, finished tops in two segments. The research, conducted in the United States, was based on how new vehicle owners rated their vehicles in 19 product categories. Responses were received from 27 000 buyers.

World leader Toyota failed to win even one category, although its Lexus luxury division’s RX350 was rated top in the near-luxury SUV segment. Toyota and Lexus continued to fare well in the area of “nothing went wrong”, but now face strong challenges in the finer definition of quality from Hyundai, Honda, Infiniti (Nissan’s luxury brand) and US domestic brands such as Ford.

The only other brands, besides Hyundai, to produce three category winners were Nissan and Ford. The BMW Group also collected three, but there was only one for BMW, with the other two being earned by the British-built Mini.

General Motors, Honda and Mercedes-Benz each collected two awards, with Dodge, Lexus and Volkswagen each earning one. BMW came out as the top-scoring overall brand for the eighth time in nine years, while Volkswagen was rated best of the full-line, volume vehicle makers.

RENAULT DEALERS LAUDED FOR SERVICE EXCELLENCE
The inaugural Renault Global Quality Awards ceremony, which was held in France earlier his year, honoured top dealerships around the world with awards for good customer satisfaction ratings in the areas of both sales and after sales service.

Competing against dealerships and sales networks from 30 other countries, Renault Richards Bay and Renault Welkom, who won the Dealership of the Year award in 2005, each received recognition. Jannie Venter was the Welkom representative and Janene Beattie accepted the award on behalf of the Richards Bay dealership.

“This is a team effort and I would like to thank our customers for their support and recognition of the quality of our service to them before, during and after the sale,” said Beattie and Venter.

La Regie aims to rank among the world’s top three car makers in terms of customer satisfaction by 2009 and Dr Jean-Jacques le Goff, Renault SA’s managing director, praised the lauded local dealers

“As 2006 Renault Global Quality Award winners, you are ambassadors of the brand. Since the implementation of the Renault Excellence Plan in February 2006, you have met and exceeded our expectations by achieving extraordinary levels of customer service,” he said.

IMPERIAL’S REGENT LIFE UNDER FIRE
The Imperial Group’s Regent Life insurance subsidiary has been scrutinised by leading investigative journalist Bruce Cameron, of Personal Finance.

He has revealed that Regent Life has been paying motor dealerships far in excess of the permitted maximum incentives to the detriment of consumers who take out insurance when buying a new or used vehicle. In terms of the Long Term Insurance Act, commissions are limited to 7,5 per cent of premiums or 22,5 per cent if the financial services provider, such as a vehicle dealership, undertakes administrative duties on behalf of the insurer. Personal Finance alleges that Regent paid commissions as high as 50 per cent of insurance premiums, with the highest commissions going to dealerships in the Imperial Group

Woolworths' gift vouchers have evidently also been used as incentives by Regent Life. DaimlerChrysler SA is evidently involved in these incentives as it sells Regent policies under a “white label” that does not show Regent as the insuring company. Regent evidently also pays for car lifters, which are used to elevate cars on salesroom floors, as an incentive to dealers.

IMPORTED CARS CAN COST 50 per cent MORE TO INSURE
Insurance premiums on imported cars could cost 50 per cent more than the premium for a similar locally-manufactured vehicle, largely because of the cost of replacement parts, short term insurer Mutual and Federal has found. M&F said that the limited availability of parts for some new entrants to the local marker could delay repair work, resulting in added frustration for the owner.

Manny da Canha, the chief executive of Associated Motor Holdings (AMH) - the biggest vehicle importer in the country, disputes this claim. He said if that was the case, then he wanted to know how imported cars were gaining market share and now accounted for almost half the passenger cars sold in South Africa.

RENTAL CAR SECTOR CONTINUES TO GROW
South Africa’s car rental industry continues to show consistent double-digit growth figures and for the 12 months to the end of February 2007 rental transaction volumes were up by 12,7 per cent, while the industry’s average fleet size had grown 19,3 per cent. However, a rise of 39 per cent in theft and an increase of 22,4 per cent in the number of accidents were of great concern.

NAAMSA DEFIES CALL FOR TAX ON “THIRSTIER” VEHICLES
Naamsa has come out strongly against a proposed tax on “fuel guzzling vehicles” that was being proposed in a draft environmental fiscal reform policy. The director of energy efficiency, Elsa du Toit, called for a levy on vehicle prices of between 2 and 33 per cent depending on their size, with an extra 20 per cent loading in the case of four-wheel drives. She also proposed a levy of between 5 and 100 per cent in annual licensing fees, with an exemption for small vehicles.

The association stressed that improvements in vehicle fuel efficiency or the adoption of renewable fuels should be driven by fuel price and related practical factors rather than by any taxation that was technology prescriptive.

CHAIRMAN OF EMPLOYMENT EQUITY BODY DISAGREES WITH SKILLS SHORTAGE RESEARCH
Former Toyota SA employee Jimmy Manyi, now chairman of the Commission for Employment Equity, says the country’s so-call “skills shortage” was an “urban legend.” He claims there is an under utilisation of available skills.

Manyi's views fly in the face of a Deloitte survey of 300 companies in South Africa that found 76 per cent of them were finding a scarcity of affirmative action candidates when trying to recruit new employees. The survey, dubbed the “national remuneration guide for 2007” found there was a particular shortage of skilled artisans, including motor mechanics, toolmakers and engineers.

GROWING VEHICLE PARC PUTS PRESSURE ON SERVICING
The rapid growth in the South African vehicle market is putting immense pressure on dealerships to provide after sales service. There are reports of people having to wait as long as a month for an appointment as more than
2 000 vehicles come on to the country’s roads every working day.

Norman Lamprecht, executive manager at NAAMSA, says that if sales continued at the current rate more and more dealerships would not be able to cope with servicing demands. There are an estimated seven million vehicles on local roads with an average age of 11 years.

CMH LIFTS PROFITS 12%
Vehicle retailer Combined Motor Holdings (CMH) has announced a 12 per cent jump in profit as economic growth accelerates sales. Net income climbed to R185,7 million in the past financial year (to end March) – up from R165,2 million - with the value of sales increasing by 34 per cent to R9 billion.

CMH sold 26 806 new vehicles during the fiscal year (23 per cent improvement on the previous year) and used vehicles sales climbed 40 per cent.

AUCTIONEER SMILES AS DEMAND RISES
Auctioneers Burchmore’s are smiling as their sales surge. Comparing June 2006 with June this year they have posted a 71 per cent rise in sales. The company’s chief executive, Darryl Jacobson, said the company’s year-to-date turnover (January to June) was 66,4 per cent up on the same period a year ago, while the sale of new vehicles is down 0,6 per cent. He says profits have also soared, going up 105,4 per cent on a year-to-date basis.

CHINESE MAKER TO USE MG BRAND FOR GLOBAL EXPANSION
The Nanjing Automotive Group of China, which owns the MG brand for sports cars and saloons, is to use the iconic brand as part of its global expansion strategy. The main production facilities are in China, but there is also small-scale assembly at the former MG Rover plant at Longbridge in Britain.

The MG roadster and two saloons, with the brand renamed Ming Jue or Modern Gentleman (MG!), will go on sale in China in the second half of this year. The company also manufactures and sells the Roewe 750, based on the Rover 75, in China and had sold 4 000 units in the fist five months of the year.

The company plans to sell 200 000 passenger cars and 400 000 trucks and buses under its own brands by 2010.

NISSAN LENDS A HAND
In order to help equip the younger generation with adequate tools for a fulfilled learning experience, Nissan South Africa recently donated engines and related engine parts to three Further Education and Training (FET) Colleges in the North West province.

The purpose of this venture was to provide predominantly previously disadvantaged individuals with experiential training. These individuals have to be studying motor mechanics in the Engineering Department of their FET college.

As part of their ongoing corporate social investment (CSI) programme, Nissan SA will donate engines and related engine parts to other FET colleges in Gauteng and Limpopo.

TURKISH BUS MAKER TARGETS SA
Turkish bus and coach manufacturer, Temsa, a wholly-owned subsidiary of the R75-billion Sabanci group, plans to enter the South African market. The company already produces RHD models for the UK market and is looking for a local distributor for support in this venture.

Established in 1968, Temsa produces, among other vehicles, the Mitsubishi Canter under licence for the Turkish market. The production target for this year is 1 000 buses and 1 500 midibuses to beef up its claim to be one of the largest independent bus and coachbuilders in Europe.

McCarthy Motor Holdings (MMH), the vehicle retail subsidiary of the listed Bidvest group, is setting up a dedicated organisation to handle the Chinese vehicles it has just started importing. (MMH recently launched a range of construction equipment sourced from China).

MMH chairman Brand Pretorius claims the new division could add about 5 per cent (or R800 000) towards the group’s turnover of almost R20 billion in the medium to longer term.

SUPER GROUP TO BUILD ANOTHER CHINESE TRUCK RANGE
Super Group Industrial Products, a division of JSE-listed Super Group has signed a deal with two Chinese companies that it says will add R300 million a year to revenue and help it gain a 10 per cent share of the heavy truck market. It is expected that these Shaanxi’s F2000 long haul trucks will go on sale in August. The target is to produce 500 of these trucks in the first year. (Shaanxi is fully owned by the Chinese government).

The company is spending R50 million to expand its manufacturing plant in Pietermaritzburg and to hire 100 more workers for this project.

Super Group is already involved in the assembly of Powerstar trucks for the construction and mining sector through its subsidiary, Firmaco Heavy Trucks.

SA’S MIDP MUST BE IMPROVED TO BE COMPETITIVE
Johan Cloete, a former director of motor industry matters at the Department of Trade and Industry (DTI) says that the long-awaited update of the Motor Industry Development Programme (MIDP) will need to be substantially changed to enable the local motor industry to be globally competitive.

Cloete, who was project leader of the government’s latest MIDP review, was speaking at the SA Automotive Conference, held in Gauteng recently. (The outcome of the MIDP review was originally scheduled for release in the fourth quarter of 2006, but may only be released in the latter half of this year).

He said a key issue was a shared vision by all role players (right up to the year 2020) for South Africa to become a supplier of choice for international automotive component and vehicle manufacturers.

HIGHWAY UPGRADE COMES AT A PRICE
There was good news and bad news for motorists with the announcement that a fourth lane will be added to the Ben Schoeman highway as part of a R22 bilion upgrade of about 500 km of Gauteng roads over the next seven years. Two lanes will be added to the R21 in each direction. (This road runs between Tshwane and OR Tambo Airport).

The bad news was that a toll system was to be instituted on every freeway in Gauteng, including the Ben Schoeman. The current proposed fee for using the Ben Schoeman will be 30c a kilometre, with electronic collection of the fee.

98% OF RMI’S COMPLAINTS RESOLVED
The Retail Motor Industry organisation (RMI) has reported that its Consumer Affairs department resolved 98 per cent of the 5 343 complaints it received last year about member and non-member dealerships. 5 300 were resolved, with 1 012 having gone through mediation and nine through arbitration.