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Cheaper cars 'a must' for SA

2006-03-17 10:02

John Oxley

That's the call from Brand Pretorius, chairman of McCarthy Motors, one of the country's largest retail motor groups, and a well-known commentator on the motor industry.

Speaking at the start of the Durban Motor Show on Friday, Pretorius said affordability was the key to sustaining the growth of the industry.

"If we want to unlock the potential of our local market we have to make vehicles more affordable," he said.

He pointed out that in the US it takes an average household 26 weeks of earning to buy an average car.

However in South Africa, taking the total population into account, it takes a massive 164 weeks.

"We must look at all alternatives, including cheaper vehicles from India and perhaps China," he said.

At the same time Pretorius praised the work the industry has done to improve so far.

Investment levels are at an all-time high, and he forecasts sales of 700 000 for 2006.

Exports could hit 210 000 vehicles by the end of this year, and affordability is much better than it has been for many years.

However, he said the industry faces challenges in terms of infrastructure - both in terms of delivering vehicles from the ports to customers, and in terms of after-sales service.

Affordability, although much improved in real terms, still needs to be better.

And the Government needs to continue with the export credits component of the Motor Industry Development Plan (MIDP).

"Export credits are an insurance policy against currency fluctuations," he said.

He also pointed out that these credits had enabled the motor industry to import cheaper cars.

He also rapped the Government over recent perks tax legislation that has pushed the amount car owners pay in tax to new levels, and which will lead to a buy-down trend. "Perks tax should be comparable to what one finds in other countries," he said.

Further challenges include increased BEE transformation, better customer fulfillment, and most importantly, unlocking shareholder value so dealers, manufacturers and importers can continue to invest.

"Having said all that, I have every confidence the motor industry will meet the challenges and go from strength to strength," he said.

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