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BusinessLive reports that more than a quarter of small and medium enterprises (SMEs) in the SA motor industry could close if the national coronavirus lockdown is extended beyond the end of April at a cost up to 24,000 industry jobs.
This was indicated by Mike Mabasa, CEO of the National Association of Automobile Manufacturers of SA (Naamsa). Many of the casualties could be small suppliers of sub-components and services, because they lacked the scale and cash flow to sustain them through a prolonged period of inactivity. Mabasa said average cash reserves across the industry were sufficient for only one month and many companies were likely to limit employee payments at the end of April. He reckoned that 21% to 30% of SMEs "are likely to close" because of the effects of the pandemic. If the lockdown continued to early May, Mabasa said 11% to 20% of the pre-crisis workforce would lose their jobs. If it went to end-May, this would rise to 21% to 30%. Vehicle and components manufacturers employ about 120,000 people. Renai Moothilal of the National Association of Automotive Component and Allied Manufacturers (Naacam) said the projected volume of automotive product demand was so heavily reduced that it would be difficult to see how employment numbers in the whole value chain could be maintained at pre-crisis levels.
- Read the full original of the report in the above regard by David Furlonger at BusinessLive
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