Economy & Business News - 29 January 2024

29 Jan 2024

ECONOMY & BUSINESS

• Cars most targeted by hijackers. Over the course of 2023 and into the new year, security groups noted seven vehicle models in the crosshairs of hijackers across South Africa – including Corolla Cross, having been launched just over two years ago. According to Fidelity Services Group CEO, “hijackers target specific vehicles for a specific purpose and market. The demand for Toyotas, VWs, Fords, and Nissans remains high on the black market,” he said. According to Fidelity’s latest data, the seven most high-risk models, in no specific order, are: Toyota Fortuner (GD6 and D4D); Toyota Hilux (GD6 and D4D); Toyota Corolla Cross; Toyota RAV 4; VW Polo (especially hatchbacks); Nissan NP200; and Ford Ranger (both double and single cabs). In addition to these seven models, Bartmann noted hijackers are increasingly targeting utility vehicles and trucks for the cargo – particularly the Hyundai H100s. (Read More Here)

• Annual producer price inflation (PPI) (final manufacturing) was 4,0% in December 2023, down from 4,6% in November 2023. The producer price index (PPI) decreased by 0,6% month-on-month in December 2023.  The main contributors to the headline PPI annual inflation rate were:  food products, beverages and tobacco products (increased by 4,6% year-on-year and contributed 1,2 percentage points); metals, machinery, equipment and computing equipment (increased by 6,8% year-on-year and contributed 1,0 percentage point); and transport equipment (increased by 6,7% year-on-year and contributed 0,6 of a percentage point). Motor vehicles producer price inflation was 9.6% in December 2023 vs December 2022. (Read More Here)

• Average annual consumer price inflation (CPI) was 6,0% in 2023, it was 0,9 of a percentage point lower than the corresponding average of 6,9% in 2022. Annual consumer price inflation was 5,1% in December 2023, down from 5,5% in November 2023. The main contributors to the 5,1% annual inflation rate were: food and non-alcoholic beverages (increased by 8,5% year-on-year and contributed 1,5 percentage points); housing and utilities (increased by 5,7% year-on-year and contributed 1,3 percentage points); miscellaneous goods and services (increased by 5,1% year-on-year and contributed 0,7 of a percentage point); and transport (increased by 2,6% year-on-year and contributed 0,4 of a percentage point). Purchase of vehicles inflation in December 2023 vs December 2022 was 7.9%. (Read More Here)

• Toyota South Africa plans to invest in new equipment, upgrading facilities and carbon neutral activities and will soon make an announcement on manufacturing components locally, which is likely to create jobs. “We are making significant investments even in this soft economic environment because we have a long-term view that if we don’t invest, it’s going to be very difficult for us in the future,” said Toyota South Africa president and CEO Andrew Kirby.” Manufacturing operations would need to change significantly, not only to achieve carbon neutral targets but because the technology and processes used would be different. “The biggest opportunity for job creation is in localising manufacturing components and we’ll make some announcements later in the year related to investments.” (Read More Here)

• The number of liquidations decreased by 13,1% in 2023 compared with 2022. Liquidations of companies decreased by 15,6% (from 1 091 to 921) and liquidations of close corporations decreased by 9,8% (from 816 to 736). (Read More Here)

• Jobs on the line in the steel sector. Over a five-year period, the average 1.3% a year decline in the metals and engineering sector will lead to an average 2.9% decline in employment, or 293 754 direct and indirect job losses, industry organisation Steel and Engineering Industries Federation of Southern Africa (Seifsa) COO Tafadzwa Chibanguza warns. This is based on the statistics that, between 2008 and 2023, production contracted at a rate of 1.3% a year, while employment decreased by 2.9% a year, which led the sector to lose 214 636 jobs, or 37.2%, since then. There are 362 871 people currently employed in the sector, down from the 577 507 people employed in 2008. (Read More Here)

• Tesla warned that its electric-vehicle sales growth could be “notably lower” in 2024. In its latest earnings report the firm also revealed slower revenue growth and shrinking margins in the last quarter of 2023. Shares in the carmaker fell by more than 5% on the news. Elon Musk, the firm’s founder, said production of a lower-cost EV built using “revolutionary manufacturing technology” would begin in 2025. (Read More Here)

• Pressure growing over Transnet debt. Futuregrowth Asset Management, one of South Africa’s biggest institutional bond investors, says taxpayers taking over Transnet debt or a capital injection are the most logical ways to free the company from its R130 billion debt, which incurs more than R1 billion a month in interest payments. Pressure is building on the Treasury to bail out the company whose sprawling logistics infrastructure spanning railway lines, ports and terminals makes it a systemic risk to the ailing economy. (Read More Here)

• Electric vehicles in South Africa. Elon Musk has said that South Africa "does not make sense for Tesla." The "super high" import duties levied on electric vehicles in South Africa means that exporting cars to the country does not make sense for Tesla. This is according to the electric vehicle maker's South African-born CEO, Elon Musk, who was responding to a question on the issue on the X platform, formerly Twitter, on the weekend. Incentive packages to help the South African automotive industry manufacture electric vehicles are expected to be announced this month. (Read More Here)