But Naamsa director Nico Vermeulen said although the domestic market was likely to remain challenging, prospects for good export growth this year were positive.
Naamsa's original vehicle output and export projections for last year were revised sharply downwards during the year, largely as a result of a seven-week strike in the industry from mid-August to early October last year.
Analysts have estimated the strikes cost the motor industry about R20bn.
"There simply wasn't enough time between the end of the strike and the annual closure on the 13 December for the companies to make up for lost production," Vermeulen said.
However, he said some of this lost production will be recovered in the early part of 2014.
Aggregate vehicle exports last year, at 275,822 units, were well down from Naamsa's original vehicle export projections of 336,000.
Meanwhile, Naamsa's figures show that aggregate new vehicle sales in SA grew only 3.2% in volume last year. This was well below original expectations for 7.3% growth in domestic sales volumes for the year.
Standard Bank economist Sibusiso Gumbi said that domestic vehicle sales growth momentum waned last year while export growth, discouragingly, contracted.
Last year was testing for vehicle manufacturers, as it was marred by costly strikes, lost investment opportunities, higher costs because of a weaker rand, stagnant economic growth and consumer financial pressures.
The industry lost an opportunity to attract further investment and boost production when BMW pulled the plug on plans to build its new 3-series model in SA. The car manufacturer cited labour strife as its primary reason.
But Mercedes-Benz SA's chief executive Martin Zimmermann said in October that his company would invest R3bn in producing the next generation C-Class in SA. The plan was likely to come to fruition this year, he said at the time.
Similarly, the Mumbai-based Mahindra Group said it had given a vote of confidence to doing business in SA and the rest of Africa by holding its recent annual Blue Chip company conference in Cape Town.
Mahindra chairman and managing Anand Mahindra said at the conference, held last month, he was encouraging Mahindra's various divisions to evaluate business opportunities on this continent.
Naamsa expects industry production to rise significantly in coming years - particularly the production of light commercial vehicles - as a result of the Automotive Production Development Programme. The programme, implemented last year, provides incentives to spur the industry's growth.
The programme is aimed at increasing vehicle production to 1.2m units a year by 2020 - more than double the 550,000 vehicles produced in 2013. Part of its focus is on producing electric and hybrid vehicles.
"Local motor vehicle production was expected to rise to about 611,000 vehicles this year, mostly because of healthy export growth," Vermeulen said.
Investec economist Annabel Bishop said last month that the weak rand had not yet raised SA's competitiveness, as strikes had eroded much of the benefits the reduction in the value of the rand could have brought.
She said that stimulating the global demand for local products through a weaker rand is meaningless if the demand could not be met in full because of strikes, logistics, erratic power supply or other problems.
Source: Business Day via I-Net Bridge
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