South Africa: Motor city in neutral but lost jobs in overdrive

General Motors production line. (Image: GMSA)

Industry insiders are warning that if the 2008 trend of reduced demand continues through 2009, businesses would have to cut working hours and jobs to ensure their survival.

The automotive industry - one of the sectors used to gauge South Africa's economic health - has been a cornerstone of more than decade of growth, with a government strategy envisioning vehicle production increasing to 1.2 million units annually by 2020 from the current level of about 500,000 units.

The sector accounts for about 10 percent of manufacturing exports and 7.5 percent of gross domestic product, making it a crucial weapon in combating South Africa's unemployment rate, officially estimated at 24 percent.

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