Time for carmakers to look to local suppliers
Mabuyane on a mission to grow automotive industry in E Cape
Economic development MEC Oscar Mabuyane is on a mission to grow the automotive industry in the Eastern Cape by getting car manufacturers to have their parts made locally instead of importing them.
Mabuyane said such engagements started this week in Port Elizabeth, when he held a brainstorming session with manufacturer Jendamark as well as the automotive industry development centre (AIDC) on contracting more local suppliers to manufacture equipment and parts.
He said it was necessary for local suppliers to produce car parts for leading industries because “if we don’t regulate this and just invite investors into our space without discussing terms and conditions, we will not be able to grow our economy”.
South Africa is the 18th largest manufacturer of vehicles in the world and the automotive industry is the third largest sector in South Africa. The Eastern Cape is home to international brands such as Mercedes-Benz SA in East London, and Volkswagen and Ford in Port Elizabeth.
He commented on the need for the policy shift after meeting with Jendamark MD Quinton Uren. Uren was recently crowned Africa’s top industrialist of 2018, an annual award run by All Africa Leader’s Business Association.
Jendamark manufactures automotive assembly systems and production lines for all aspects of powertrain systems, including differential assembly systems, axle assembly systems and engine assembly systems.
The announcement comes a few months after President Cyril Ramaphosa assigned a special envoy to go and recruit investors worldwide.
The target is to inject more than $100bn (R1,432bn) into the South African economy.
Mabuyane said new investors who came into the country would have to do things differently.
He singled out Chinese investors who have established Chinese malls in almost every city and town in SA, saying that as things stood there were no clear guidelines on how they should be contributing to creating the much-needed jobs.
“We want something that is going to be sustainable for our country, something that must create a base for the development of young people – both those who are at school and also something to help us reskill our human resources.
“So it is important that we must plug whatever new development and investment that comes into what we are doing that is already globally competitive,” said Mabuyane.
Also present at the meeting was Weza Moss of the AIDC.
Mabuyane said manufacturers of original equipment for car parts, “must take their enterprise development funding and plug it into the work done by small and medium enterprises in the sector, because their success in producing cars depends on the success and strength of the supplier base.
“Key to our economic growth is focusing our energies on growing the supplier base of the automotive sector.
“That is the only place where you can grow jobs, create more jobs and stimulate the economy,” said Mabuyane.
Reacting to the announcement, Moss said the AIDC is in the middle of doing a study to examine companies that were transformed, and to support those battling to meet their transformation targets.
If we just invite investors into our space without discussing terms and conditions, we will not be able to grow our economy