Johannesburg - When Zafar Wahid, a project manager with Liberty Life insurance company, was relieved of his car at gunpoint in Johannesburg recently, he knew exactly where to go to get a knock-down replacement.

On an unseasonably cold summer's evening, Wahid, still wearing his work trousers and tie, walks past a string of cars in Burchmore's showroom in northern Johannesburg, towards the auction room, where around 200 people are crammed into rows of tiered plastic seats.

"I'm hoping to get a little runaround," he says as auctioneer Dave Price opens the bidding on a string of near-new cars to a mixed audience of families and dealers.

In the end Wahid falls for a 2006 Volkswagen Jetta that wasn't on the list. The gavel comes down at 120,000 rand (11,628 dollars) - one third off the retail price.

From top-of-the-range cars to homes, boats and quadbikes, South Africans, doubly squeezed by a local credit crunch and a looming international recession, are waving goodbye to some of their hard-gotten gains.

Of the around 50 cars sold by Burchmore's that evening, several have been repossessed by banks from their owners because they could not meet the repayments.

Each month, between 6,000 and 7,000 cars are repossessed nationwide. Repossessed homes are also going under the hammer. One of the country's biggest auction houses, Alliance Group, says it has auctioned off more than 1500, mostly middle-class homes since January.

The squeeze started in earnest last year in mid-2007, well before the collapse of US investment bank Lehman Brothers, when the government introduced legislation to tighten access to credit.

In hindsight, most people are now thankful for the National Credit Act, which spared banks the mound of toxic debt that toppled financial institutions in mightier countries.

But the act, which coincided with a sharp rise in interest rates - five full percentage points since June 2006 that tracked rising inflation - did put the skids on big-ticket spending.

"What surprised us was the extent of the slowdown," says Berry Willis, chairman of BMW South Africa's dealer association.

"We're bucking the trend (21 per cent fall in unit sales in the industry). We're down about 15 per cent," Willis says, looking morosely through the glass window of his office at a six-floor showroom of gleaming BMWs.

Just when car dealers and estate agents were hoping for a reprieve, along came the international financial collapse.

While being praised for the prudence of its monetary policies , South Africa, like other emerging markets, is being whacked as Western investors yank their money out of supposedly "risky" destinations.

The local currency, the rand, fell to a six-year low against the dollar in October and demand for the commodities like platinum on which South Africa relies for foreign exchange has begun to plummet, raising fears for thousands of jobs in mining. Platinum, which is used mainly in car manufacturing, and of which South Africa is the world's biggest producer, has fallen over 60 per cent from its March record of nearly 2,300 dollars an ounce.

Adding to the jitters is the growing political uncertainty caused by a split in the ruling African National Congress and a threatened leftward jump by the party. International ratings agency Fitch earlier this week downgraded its outlook for South Africa to negative.

"Its just a total melting pot of issues," says Willis, who has spent half a century in the automotive industry. "We've been through ups and downs before. But never have we been in a situation where everything is compounded at the one time."

His main concern is for the 3,000 workers employed at BMW's manufacturing plant near Pretoria. BMW South Africa manufactures
50,000 cars each year, including 12,000 3 Series cars for the domestic market.

If those cars don't sell, the official unemployment rate of 23 per cent (closer to 40 per cent if you add those who have stopped looking for work) will rise further.

Already BMW, whose core client base of so-called "black diamonds" has been relatively shielded from the crisis, has slashed its production for the domestic market by 2,000 vehicles.

In the midst of the turmoil, South Africans have found a new reason to be glad about the 2010 football World Cup. Building and refurbishing 10 stadiums for the tournament has alone created around 20,000 jobs. (dpa)