Delta Motor Corporation has been forced to cut production days for January and February due to the current market situation.
Delta Motor Corporation has been forced to cut production days for January and February due to the current market situation.
Motor sales are expected to decline this year due to the rand still battling to stabilise, the hike in car prices this month and an interest rate increase, but Delta is the first manufacturer forced to cut production days.
"The company confirmed that in line with the current market situation it has revised its schedule to incorporate non-production days. Both production facilities have been affected by short time arrangements for the period January through to February," said Denise van Huyssteen, Delta manager of corporate communications.
Van Huyssteen said the company has removed four production days from its schedule. “The decision was taken directly in response to a poor market outlook based on broad economic and industry circumstances.
"Should it be deemed necessary the company will be initiating a further review based on an ongoing assessment of market conditions,” she said.
An industry analyst said that it was not surprising that Delta has been forced to take this action. He said there is unlikely to be any layoffs, it would just mean shifts would be shortened and therefore employees would be paid less. But the manufacturer won’t reduce its workforce so it can continue working when production is increased again, he speculated.
Ford said it had no intention of switching to short-time. “We have no need to do so at this time,” said Ford spokesman Craig von Essen.
Volkswagen said it was not planning a similar move. “We actually started up again a week earlier this year,” said spokesman Mark Derry. “Volkswagen will be producing 30 000 Golf IV models for export and 45 000 for the South African market, which is 75 000 for the year. So we certainly have no plans for short-time arrangements. We will be watching the market very closely, but we do have our targets for the year,” he said.
Nissan also said it was concerned about the current market situation, but running at full production. Roel de Vries, vice-president of product marketing, said the manufacturer had made no decision to cut back on production.
Fiat spokesman Nancy Rispoli said the manufacturer was not cutting production days, but had decided not to increase production this year to what it had initially forecast. “We sold 15 000 units last year, that includes Fiat and Alfa Romeo, and we are looking at a similar amount this year,” she said.
