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Uno production grinds to a halt
CAR SALES
DECLINING sales and a resultant build-up of stocks has prompted Automakers to close its Fiat Uno production line for four weeks. The line was closed two weeks ago and will be restarted in early August. Johan Kleynhans, head of communications at Automakers, says the company has eight weeks of stock on hand - sufficient to meet demand in the shut-down period. During this time, maintenance will be undertaken on the line. Traditionally, maintenance is done during the Christmas break. Ironically, the shut-down comes only two weeks after the Uno celebrated the seventh anniversary of its launch in SA. During this time 80 000 Unos have been sold. However, in recent months Uno's sales volumes have tumbled following the launch of newer entry-level cars such as the Opel Corsa and Ford Fiesta. In the first six months of this year, sales declined 45.5% to 4 031 from 7 398 in the same period last year. Market share has halved - down to 3.2% from 6.2%. Sales of Nissan cars have declined by a similar margin. In contrast, total sales of new cars increased 3.1% to 122 477 in the first six months of this year from 118 780 last year. Andrew Unwin, Fiat Auto's liaison officer in SA, says the long-standing manufacturing agreement between Automakers and Fiat is still in place although Fiat is discussing the possibility of establishing its own marketing division as a separate entity from Automakers. No further developments have taken place since a separate marketing division was first suggested when Nissan Japan bought a 50% stake in Automakers and the share was delisted from the JSE. The difficult trading conditions have affected other sectors of the vehicle market. Mercedes-Benz said this week it is to introduce a four-day week at its East London plant from August. "The lower market volume currently being achieved by our products and forecast for the next few months has forced us to reduce our production levels, which in turn affects our manpower levels," says Johann Evertse, management board member for human resources. "We continue to view retrenchment as the very last resort." However, the company has barely lost ground in the passenger car market, with sales in the first six months of this year at 12 188 compared with 12 341 last year. In the commercial market losses have been more severe with sales of 4 440 this year against 5 172 last year. Discussions between the company and Numsa regarding the shortened working week for 2 500 hourly paid workers have been successful. Talks are under way to establish parameters for production performance bonuses and these could help to offset the loss of earnings, says Evertse.
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