According to Naamsa, local car and light commercial vehicle manufacturers generated a record net profit before tax of R4,1 billion last year, up by 10 per cent from 2001.

According to Naamsa, local car and light commercial vehicle manufacturers generated a record net profit before tax of R4,1 billion last year, up by 10 per cent from 2001.

The seven locally based car and light commercial vehicle makers generated a record net profit before tax of R4,1 billion last year, up by 10 per cent from 2001.

R3,7 billion was achieved in 2001, compared with R1,28 billion in 2000, figures in the latest National Association of Automobile Manufacturers of SA (Naamsa) annual report revealed.

According to Business Report the net profit of car and light commercial vehicle manufacturers totalled R2,038 billion in 1995. It slumped after the introduction of the government's motor industry development programme (MIDP) in 1995 to a profit of R520 million in 1996 and a loss of R547 million in 1997. There was a recovery to a profit of R109 million in 1998 and R79 million in 1999.

The report said the advent of the MIDP was characterised by significantly reduced levels of protection and resulted in intensely competitive market conditions and severe pressure on the margins of manufacturers from 1996 to 1999.

"However, the profitability performance of individual manufacturers continues to show substantial differences, with at least two car/light commercial vehicle manufacturers reporting losses during 2002.

The report did not name the manufacturers that reported losses last year but they are widely believed to be those without major completely built up (CBU) vehicle export contracts.

Of the seven locally based vehicle manufacturers BMW, DaimlerChrysler and Volkswagen secured major CBU export contracts several years ago. Toyota started a volume export programme to Australia in April. Ford's export programme gets under way next year and will gain momentum from 2005.

Nissan CBU exports are currently largely into Africa, but the company expects to secure a major CBU export contract in the next few years.

Delta Motor Corporation has not secured a CBU export contract and is unlikely to get one until General Motors, which has a 49 percent shareholding in the company, increases its stake to make it a majority or wholly owned subsidiary.

Naamsa said medium and heavy commercial manufacturers made a net profit before tax of R534,7 million last year compared with a profit of R225,5 million in 2001.

Original article from Car