Man­u­fac­tur­ing keeps the wheels turn­ing

IN­DUS­TRY NEWS/ As part of the Fes­ti­val of Mo­tor­ing at Kyalami, we at­tended the Naamsa Con­fer­ence along with au­to­mo­tive in­dus­try big­wigs, writes Ler­ato Matebese

Business Day - Motor News - - MOTOR NEWS -

The au­to­mo­tive in­dus­try is a key player and con­trib­u­tor to the coun­try’s gross do­mes­tic prod­uct and em­ploys a great num­ber of peo­ple in di­rect and in­di­rect jobs through­out the value chain.

Man­u­fac­tur­ing re­mains a big cog in the au­to­mo­tive wheel with lo­cal man­u­fac­tur­ing in par­tic­u­lar re­main­ing a back­bone of the coun­try’s in­dus­tri­al­i­sa­tion.

To get bet­ter in­sight of this fact, we at­tended an au­to­mo­tive con­fer­ence held un­der the aus­pices of the Na­tional As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers of South Africa (Naamsa) as part of the 2018 bi­en­nial Fes­ti­val of Mo­tor­ing that took place at the Kyalami Race­track in Jo­han­nes­burg.

Many au­to­mo­tive man­u­fac­turer big­wigs were in at­ten­dance at the con­fer­ence, at which top­ics re­lat­ing to the fu­ture of the lo­cal au­to­mo­tive in­dus­try were dis­cussed. eq­uity in the au­to­mo­tive seg­ment and this in­cludes get­ting more sup­pli­ers of colour into the sup­ply value chain,” Oc­to­ber said.

“It is not just about the land is­sue, but rather the ex­clu­sion of 90% of the pop­u­la­tion from the econ­omy that needs to be ad­dressed.” The “master plan” was to move to Level 4 [on the broad-based black eco­nomic em­pow­er­ment score­card] from the year 2020, which would see an in­crease in the num­ber of black ve­hi­cle sup­pli­ers through the au­to­mo­tive value chain, Oc­to­ber said.

An­other key speaker at the con­fer­ence, An­drew Kirby, chair­man of Naamsa and pres­i­dent and CEO of Toyota SA, said lo­cal man­u­fac­tur­ing orig­i­nal equip­ment man­u­fac­tur­ers), were fully com­mit­ted to the “master plan” pro­gramme.

How­ever, there were some chal­lenges fac­ing en­tire value chain, he said.

Dis­tinct to the South African mar­ket, he said, we were likely to go through a flat pe­riod for the fore­see­able fu­ture, but vol­umes would come.

Kirby said the cur­rent to­tal num­ber of ve­hi­cles ex­ported from SA was 344,000 units an­nu­ally. This would need to be ramped up, but for that growth to come the lo­cal man­u­fac­tur­ing and ex­port pro­grammes needed to be glob­ally com­pet­i­tive. still the

“To achieve global com­pet­i­tive­ness, there needs to be a sym­bi­otic re­la­tion­ship be­tween lo­cal­i­sa­tion of sup­pli­ers ver­sus parts costs,” he said.

“The way for­ward will re­quire a great deal of col­lab­o­ra­tion, syn­chro­ni­sa­tion and an in­clu­sive value chain be­tween orig­i­nal equip­ment man­u­fac­tur­ers and distrib­u­tors and deal­ers and re­tail­ers, not to men­tion the score­card pro­gres­sion, own­er­ship (at dealer level) and lead­er­ship as­pects that need to be duly ad­dressed,” Kirby said.

Jef­frey Din­ham, an econ­o­mist at Econometrix, said the au­to­mo­tive in­dus­try re­mained the fourth largest con­trib­u­tor to man­u­fac­tur­ing in the coun­try and that if SA lost its do­mes­tic au­to­mo­tive pro­duc­tion, there would be no al­ter­na­tive or re­place­ment in­dus­try. That was a sober­ing thought, no mat­ter how it was sliced, how­ever the com­mit­ment from var­i­ous man­u­fac­tur­ers to con­tinue build­ing ve­hi­cles lo­cally boded well for the fu­ture of SA.

Aside from ve­hi­cle man­u­fac­tur­ing, SA also man­u­fac­tures ex­haust cat­alytic con­vert­ers for 10% of the global mar­ket, thanks to the coun­try’s plat­inum re­serves, plat­inum be­ing a key com­po­nent of cat­alytic con­vert­ers.

Din­ham also men­tioned that through their var­i­ous cor­po­rate so­cial in­vest­ment ini­tia­tives, orig­i­nal equip­ment man­u­fac­tur­ers in­jected back into the econ­omy about R955m be­tween 2015 and 2017.

This em­pha­sised the crit­i­cal im­por­tance of the lo­cal au­to­mo­tive in­dus­try to the coun­try’s eco­nomic health.

To this end, BMW SA has up­graded its Ross­lyn plant in Tsh­wane to build and ex­port its X3 model to meet global de­mand for the ve­hi­cle.

Mercedes-Benz has in­vested R10bn in its East Lon­don plant as it pre­pares to build the next gen­er­a­tion of its C-Class model, which re­mains an­other im­por­tant model both lo­cally and in­ter­na­tion­ally.

At the Naamsa con­fer­ence, from left are An­drew Kirby, chair­man of Naamsa and pres­i­dent and CEO of Toyota SA Mo­tors; Lionel Oc­to­ber, di­rec­tor-gen­eral of the De­part­ment of Trade and In­dus­try; and Jef­frey Din­ham, an econ­o­mist at Econometrix.

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