The automotive industry in South Africa last year reduced its capital expenditure by 50% due to the uncertainty surrounding the review of the Motor Industry Development Programme, according to the National Association of Automobile Manufacturers of South Africa (Naamsa).

Capex dropped from R6.21-billion in 2006 to R3.09-billion in 2007. Naamsa indicated, however, that planned investments for this year were expected to recover to R4.37-billion.

Further, new motor vehicle production was likely to increase this year as a result of a rapid increase in vehicle export sales. While 534 490 vehicles were produced in the country in 2007, 630 000 are expected to be produced this year, an increase of 18%.

Export sales of vehicles dropped by 4.8% to 179 859 in 2007 compared to the year before, though it is possible that this figure could rise to as much as 285 000 vehicles for 2008. Domestic sales, however, are expected to decline.