AIDC – wheeling SA’s economy
Automotive manufacturing is one of the key areas for the growth of Gauteng’s economy
While the majority of industries are uncertain about the impact the global economic outlook might have on their operations, car manufacturers are preparing for a continued boom.
That is if forecasts by The Statistics Portal, an international research house with 18 000 sources, are anything to go by.
“Global car sales are expected to exceed 100 million units by 2020,” The Statistics Portal says in its forecast for the industry, which was set to sell as many as 75 million cars this year alone.
Dr David Masondo, chief executive of Supplier Park Development Company (SOC) Ltd, a subsidiary of the Gauteng Growth and Development Agency (GGDA), which trades as the Automotive Industry Development Centre (AIDC), says they are ready for the challenge.
The AIDC manages the Automotive Supplier Park in Rosslyn, 20km north of Pretoria. The Automotive Supplier Park houses transnational companies that supply BMW, Nissan and Ford with automotive spares and parts.
The companies include Faurecia, Lear, Ramsay, D&B Interiors, Johnsons Controls and Mothersons among others. Gauteng province is the largest national automotive production hub with BMW SA, Nissan SA and the Ford Motor Company of Southern Africa. In addition, the province hosts a number of assembly operations, including those dedicated to assembling buses.
While Rosslyn is the nucleus of the industry in Gauteng, there are also significant operations in Silverton (Ford SA), Ga Rankuwa, and Ekurhuleni. The Eastern Cape cities of Port Elizabeth and East London are home to Volkswagen, General Motors and Mercedes Benz plants; and Durban’s Toyota assembly plant are all major role players in the local automotive industry.
“Yes, the impact of the global downturn was felt in the SA automotive industry,” says Masondo, adding that there has however been a global recovery with strong financial performance again evident.
“Even if global demand were to increase at an annualised rate of only 1-2% from 2020 to 2035, global demand will reach between 129 million and 149 million [motor car] units by 2035 — adding an additional 40 to 60 million units of annual demand,” he says.
The National Association of Automobile Manufacturers of South Africa (Naamsa) acknowledges the impact of the economic downturn in its quarterly report, saying that “aggregate industry employment levels remained stable and reflected a marginal decline of 74 jobs to reach 31 184 positions at end of June, 2016”.
Naamsa says that domestic new vehicle sales, with the exception of heavy truck sales, showed fairly substantial declines but in contrast, export sales held steady. It estimates that there will be more than 11 million registered vehicles of all types in 2017. This spells good news for the sector, which The Automotive Supplier Park in Rosslyn is the nucleus of the automotive industry in Gauteng. The AIDC also runs an Incubation Centre in the area.
according to a department of trade and industry (DTI) report contributed approximately 7.2% of GDP in 2014. The DTI says the automotive industry is the largest manufacturing sector in the South African economy, employing more than 30 000 people.
According to the DTI the exportled growth model came under pressure in 2009 as a result of the global economic crisis, but there has since been a steady growth in both export and domestic business, which saw 566 083 vehicles produced in the country in 2014.
Masondo is confident the AIDC will continue to contribute to the growth of the sector and help create more jobs. “Our goal is to contribute towards South Africa’s efforts in doubling its production of vehicles as part of our contribution to the 100 million global car sales,” he says.
“The AIDC will continue to contribute towards skills, infrastructure and the development of black components suppliers, as well as administering government automotive incentives to retain existing and new investments to ensure that South Africa remains a role player in this highly competitive market.”
He says the focus will be on expanding automotive infrastructure while establishing and growing black entrepreneurs — all part of increasing the local content of the automotive manufacturing output in South Africa.
As part of its strategy to grow the sector and ensure a constant supply of highly skilled industry participants, the AIDC runs incubation programmes in both the township and mainstream economy.
Two of the six trainees from the AIDC Incubation Centre at Ford Silverton have graduated “as part of increasing black participation in the industry and increasing their global competitiveness. The plan is to graduate the remaining SMMEs, and enrol more into the programme and assist them in securing the business from original equipment manufacturers”.
Masondo says the Gauteng Automotive Learning Centre (GALC) — a partnership between the AIDC and Nissan SA — provides internationally accredited programmes, which offer specialised skills for the automotive industry such as mechatronics (a combination of mechanical engineering, computing and electronics) and autotronics (mechanical and electrical knowledge and skills).
He says the GALC is expected to train approximately 1 000 learners per year on automotive-related programmes, in both theory-based and practical programmes.
“All the training programmes of the centre are either MerSeta or Festo accredited. Training curricula are developed in collaboration with the industry, MerSeta, higher
education institutions and technikons. The centre’s training fills the existing gap between the high schools, higher education institutions and technikons, and provides a sound technical exposure to students. A new Artisans Training Centre is being established by the AIDC, where 13 different vocations’ artisans can be trade tested and certified. The centre will commence operations in April 2017,” says Masondo.
These include a township Automotive Hub in the highdensity peri-urban settlement of Winterveld, northwest of Rosslyn.
The hub supports and incubates township automotive body repairer and painting entrepreneurs. Masondo says the AIDC also has an automotive incubation centre established at Ford, and one at Nissan that will commence operations in 2017.
He says the hub has been transferring technical skills to township entrepreneurs, and has also created jobs that have long-term sustainability, with continuous entrepreneurial exposure and potential.
The Winterveld hub’s main focus is a spray-painting workshop, metal prep workshop and paintfinishing workshop, and currently has nine township-based auto body repairers operating it, with an annual target of repairing 100 vehicles.
“The hub has also developed autobody repair industry scarce skills, which will lead to immediate employment and/or business growth; and stimulated the local community’s economy by drawing [in] outside participation and investment.”