South Africa's vehicle exports dropped 75 percent in September due to strikes in the auto industry, the National Association of Automobile Manufacturers (NAAMSA) said on Wednesday.
"We saw a plunge in vehicle exports by 75 percent during the month of September. We are going to see similar dismal figures in the month of October," NAAMSA spokesperson Nico Vermeulen said.
All major auto manufacturers in the country -- BMW South Africa, Ford Motor Company SA, General Motors South Africa, Mercedes-Benz South Africa, Nissan South Africa, Toyota SA Motors and Volkswagen Group SA -- were hard hit by a three-week nationwide strike that ended on Sept. 9. The strike caused a revenue loss of about 20 billion rands (about 2 billion U. S. dollars). The aggregate production losses at vehicle manufacturing level amounted to over 45,000 vehicles, according to the NAAMSA. The strike had damaged South Africa's status as a reliable supplier to international export markets and could well negatively affect future export contracts being awarded to South African automotive manufacturers.
"The consequences have been devastating in terms of the number of units lost in terms of production by vehicle manufactures," Vermeulen said.
Although production has resumed in all auto manufacturers, a strike by workers at component factories is still dragging on for the fourth consecutive week, disrupting vehicle manufacturing operations as a result of the unavailability of locally produced original equipment components.
The workers are demanding a double digit salary increase while the employer is offering 7.5 percent.
With the vehicle and automotive component manufacturing sectors accounting for approximately 30 percent of South Africa's manufacturing output, the strike would inevitably result in lower economic growth and lower domestic and export production and sales, experts warn.
The American Chamber of Commerce in South Africa on Wednesday voiced concerned over prolonged strikes in South Africa, saying the strikes would dampen investors' confidence in the country.
Nowhere in the world have they witnessed strikes that lasted for weeks, said Jeff Nemeth, president of the chamber's South African branch.
"If South Africa wants to operate like global players then they have to act like a global player, for example the automobile industry is now in its eighth week of strikes and that just doesn't happen anywhere else in the world that is just from my point of view, my industry."