Automotive industry to lose before they gain
By Khuthala Nandipha
The local automotive industry is bracing itself for a tough few more months before recovery after they were allowed to fully open and trade late this week.
With a 30% staff complement and strict risk-adjusted health measures, traders such as Mike Pendock Motors and Nate's Car Sales in East London are making their own business adjustments to ensure that the lockdown does not cost them their livelihoods. They are equipped with thermometers and have applied all the required measures for staff and customer safety.
Nathaniel Padayachee, owner of Nate's cars in Amalinda has 22 employees but he could only call up six to work after a 50-day lay-off. Although his brand maintained an online presence during the lockdown, no money was made to assist with salaries and expenses.
Fortunately, he was able to pay salaries and other operational costs and still gave back to social causes to assist in the fight against the Covid 19 outbreak.
He acknowledges that what happens in other industries will impact greatly on his clientele's ability to purchase. The pricing of merchandise will drop and there will be a lot of negotiating as they need capital and running costs especially since banks dropped interest rates. "Some of our vehicles are marked way under cost as the main thing at the moment is to get cash back to keep our doors open."
Mike Pendock owner of Mike Pendock Motors said it is hard to put a monetary value to the past seven weeks of business losses, but is certain they will need four good months of sales in order to get back to where they were at the beginning of lockdown.
The Government UIF Relief Fund paid out within six days from his application, helping to ease the pressure around staff salaries.
"Going into the lockdown, a lot of businesses were already feeling the crunch. There will be a market for us, as people will look to reduce financial stress by downscaling and trading in current vehicles for affordable cars and maybe even getting out some money to pay off existing debt," predicted Pendock. He is also hoping to cash in on the online marketing during the lockdown.
Support services have also been given the green light under alert level 4, these include emergency repairs, testing centres, and overdue car service.
Bongiwe Sidunda who joined a local car dealership late last year is happy to be back at work, although she now works twice a week to ensure that all staff get a shift to make some money as well as observe the health measures. "Business is slow but we are pushing and we only take in a small number of cars for service per day," said Sidunda.