SA car makers halt production

Vehicle manufacturers produce more than 2100 cars per day in total - 50% of which are destined for export markets.

Toyota SA, Ford SA, BMW SA, Nissan SA, General Motors SA and Daimler SA, which owns Mercedes-Benz SA, and South Africa's original equipments manufacturers (OEMs) have confirmed that they have all shut down production lines until the strike ends.

The motor industry strike, which started on September 1, does not involve workers from the vehicle manufacturers themselves, but it curtails the supply of components such as tyres to vehicle producers.

Premium carmaker Mercedes-Benz SA said its C-Class model production line was at a standstill.

But Annelise van der Laan, spokesperson for Mercedes-Benz SA, said the production of commercial vehicles, trucks and buses continued as there was sufficient parts inventory.

General Motors SA (GMSA) halted the production line of Isuzu KB on Tuesday.

GMSA spokesperson Denise van Huyssteen said while two other production lines - Isuzu trucks and Corsa Utility - were still operational, the company expected them to be affected the longer this strike action continued.

Double blow

The latest disruption to production is dealing a double blow to vehicle manufacturers, which faced an eight-day industrial action that ended on August 20.

By the time this strike ended, vehicle producers jointly lost about 17 000 units and the retail value of production losses of around R3.5 billion.

The effects of the motor industry strike are already visible.

Van der Laan said the company was unable to deliver on its export orders and thus production of those export orders was being relocated to other international Daimler plants that produce the C-Class. Mercedes-Benz SA exports 70% of all C-Class cars produced domestically to the US.

The cost - lost markets

The C-Class model is manufactured at three manufacturing plant: one in South Africa, and two in Germany. "We have lost these units forever," Van der Laan said.

Disruptions, she said, dented SA's image as reliable source of production and export delivery stability. "We are competing against other C-Class-producing manufacturing facilities.

If we can't produce, we jeopardise allocation we will get in the future," Van der Laan said. South Africa is vying for a contract to build the new generation C-Class.

"We would welcome speedy resolution on the motor component industry wage dispute," she said.

Investment at risk

BMW SA said it would review its decision on whether to keep production running on a daily basis, indicating that the production plant was closed on Thursday.

Leo Kok, spokesman for Toyota SA, which shut down its plant on Monday, said the company was rapidly falling behind its production target due to the current strike.

The Automobile Manufacturers Employers Organisation (AMEO) has warned that the strike and resultant loss of volume causes significant reputational damage to the automobile manufacturing industry in South Africa as a stable production location and this could have repercussions in terms of "our ability to attract future investments going forward".

On Thursday, the National Union of Metalworkers of SA (Numsa) upped the pressure on employers in the motor industry by embarking on a march in Port Elizabeth to highlight their demands for a 15% wage increase within the service, tyre, dealership and components sectors.

On Wednesday, the unions did not accept the latest offer of 10%, up from the last offer of 6.6%.