When a clerk in a video store tells you he's turned down a sales position with a major motorcycle brand, you know things are looking grim on the auto front. The motoring market is hooked (and possibly being strangled) in a nasty catch-22: pushing up prices lessens the chance of sales; and while slashing production (read 'jobs') may keep the manufacturers afloat for marginally longer, no jobs = no money for potential buyers = no sales = no money etc, etc, ad nauseum. In the article, Car assemblers need price rises, Toyota SA chairman Johan van Zyl says vehicle assemblers and importers require hikes of up to 40%, which, in this climate, is just not possible. So what do they do? Executive director of Naamsa, Nico Vermeulen, says price increases are inevitable. Economist Tony Twine backs this up, but doesn't give an indication of how long it will take for the increases to be fully implemented. Twine touches on the other option for motor manufacturers - pull out of the market. This in itself doesn't bode well for likely buyers - who would want to buy a car when the chance that the brand will no longer be in the country to perform certified services and fulfill warranty obligations is so high? And so again we fall into the cycle that may see part of the industry eat itself. The eventual outcome could be Darwinian - those that dig their heels in and maintain a strong foothold throughout the economic riptide will be those that will flourish once the tsunami has passed. Or, in basic terms, when the consumers do start spending again, they can only buy what is here. As the Lotto line goes, "You have to be in it to win it." All that remains to be seen is who those winners will be.


Shan Radcliffe, Retail editor
retailnews@bizcommunity.com
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