Jan 2008

“At the macro level, the underlying business climate remains positive thanks to lively resources and infrastructure sectors. We would like to see government demonstrate more resolve in its war on crime as it could bite into business confidence,” says Paul Pauwen, president of SAVRALA.

“At our industry level, growth has been spectacular over the past couple years to the extent the pursuit of volumes might have been achieved at the expense of margins and, given the current state of the South African automotive market and the knock-on effect on residual values, a revisit of risk-reward profiles might be long overdue.

“On the traffic fines front, after successfully negotiating a good arrangement with the Road Traffic Management Corporation, our hopes were shattered when it decided not to ratify the agreement. We are nevertheless persevering in engaging constructively with the authorities and we have been promised our latest representations will be discussed this month.”

SAVRALA members are important contributors to the South African economy. Together they represent more than 90% of rental fleets and an even larger share of the leasing and vehicle management market. It is estimated next year the combined leasing and rental fleets will exceed 200 000 vehicles.

With 2010 in mind, the question arises as to whether there will be sufficient capacity to support rental fleets of more than 75 000 vehicles – particularly in terms of airport infrastructure, panel shops, parts availability, channels for disposal of used vehicles and the availability of human skills. The situation with respect to Kombi/minibus type vehicles is also an area of concern.

“Going forward it is necessary to raise the profile of SAVRALA even further, to the extent that eventually, authorities, corporate and leisure clients understand the benefits of prescribing membership of the Association as a pre-qualification criterion for tenders.

“A focus on strengthening our relationship with related industry bodies is even more relevant nowadays. We have so much in common and a stronger voice will be more effective when engaging with government. The need for a joint effort has become more apparent on the risk management front to help reduce accidents, fraud, abuse and theft of our vehicles. We must continue engaging with the relevant bodies in this regard.

“We must also increase the momentum in education, and skills development is a must to ensure successful transformation in our industry.”

(2008-01-Pres speech excerpts)