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Auto Parts Maker Strike Affects South African Auto Sales

The lengthened strike carried out by auto parts makers affected auto manufacturers in South Africa.  This is evident in the failure of South African auto parts sales last month to surpass or even equal the re-energized sales it incurred in August.

According to business news from The Times, Volkswagen SA Sales and Marketing Director Mike Glendinning said that the protracted strike in the auto part industry could have generated “shortages of product that constrained the market". 

Figures from the National Association of Automobile Manufacturers of SA’s confirmed that the September auto sales actually dropped.  The sales of locally produced vehicle e models went down 13 percent, and exported automobile sales also faced a 43.4 percent dive. 

The decline in auto sales last month is in all probability just part of the general downward movement of automobile sales these days.  On the other hand, Standard Bank economist Danelee van Dyk said that the numerous strikes that sprouted in the auto parts industry can be a major factor in the decrease of supplies of certain vehicle models. 

Though the downfall of auto sales can be attributed to two factors, the possibility that both could be blamed for the sales outcome is also strong.  In a statement made in The Times, General Motors Sales and Marketing Officer Malcolm Gauld said, "Although it is difficult to quantify the effect on supply of the recent strike in both the motor manufacturing and component sectors, both of these appear to have had a negative effect on the market."

The strike in the auto parts sector, which lasted for two weeks, resulted to interruption in the operation of several big auto assembly facilities.  Some of the affected automotive companies are DaimlerChrysler SA,Volkswagen SA, Nissan SA, Ford Southern Africa, Toyota SA, and General Motors.

Aside from the strike, analysts also blame other things in the cutback of sales.  Among these are the rigorous laws regarding credits and the increase in interest rates.  "The market is undoubtedly under pressure from a more constrained financial environment, with interest rates having increased by three percent in six steps since June last year, as well as from the more stringent requirements of the National Credit Act," explained Glendinning.