Overcapacity in the global motor industry could lead to the demise of one or more of the world's biggest manufacturers, automotive business expert Gert Debeer warned this week.

Overcapacity in the global motor industry could lead to the demise of one or more of the world's biggest manufacturers, automotive business expert Gert Debeer warned this week.


CARtoday.com on Thursday quoted Debeer - a director of Canada-based automotive business Autofacts - as saying that fewer, but larger multi-brand franchises were set to become the norm in South Africa and that if vehicle affordability was addressed, “the country could retail one million units a year”. Read story.


Speaking about the car industry in general, Debeer said the automotive sector was experiencing a global glut: “Annual overcapacity is 22-million units a year. Plant utilisation ranges from 55 to 80 per cent. One consequence of the excess of supply over demand is the way in which incentives are being offered to push new vehicle sales. The incentives include interest-free finance in the US, on new cars, of up to 72 months.


The US manufacturers are buying market share. We predict the bubble will burst, sooner rather than later," he said.


Demand for new vehicles would dip, with customers locked into long purchase or lease agreements; "There is a high possibility you will see car manufacturers disappear. General Motors, Ford and Chrysler have lost 25 per cent in the last five years, and they are under huge pressure," Debeer was quoted as saying.

Original article from Car