SA motor industry must grow local support
DEPENDING on how seriously it took localisation‚ in 10 years the motor industry in SA could be employing either 35 000 or 180 000 people‚ analyst Justin Barnes said.
The future of the industry was not at risk‚ he said. The only question was whether it turned into a true manufacturing industry or one that simply assembled parts.
Motor companies and their components suppliers had to work harder to increase local content in vehicles made in SA‚ or sacrifice jobs‚ skills and technology transfer.
Barnes‚ one of the architects of the government-led automotive production and development programme‚ was speaking at an automotive localisation indaba in Durban last week.
Describing the motor industry as the “golden nugget” of South African manufacturing‚ he said average local content in cars and light commercial vehicles made in SA grew to 41.5% last year‚ from 41% in 2013.
Using the definition of local content as the vehicle wholesale price less total imported content‚ he said R47.1-billion of local components were built into vehicles last year. With an average vehicle value of R212 889‚ that worked out to R88 316 worth of homegrown parts. This is well short of the industry’s target of 70%. One of the cornerstones of the 2013-20 automotive production and development programme is to incentivise more investment in the local supply industry.
The Department of Trade and Industry is expected to announce extra incentives soon as the result of a review of the programme.
Many of the parts in South Africanbuilt vehicles are wholly imported or contain imported materials.
Barnes‚ chairman of B& M Ana said sectors increasing their contribution included plastic mouldings‚ trims and harnesses.
Theunis Rootman‚ purchasing GM at Toyota SA and chairman of the motor companies’ purchasing council‚ told the conference: “We need deeper localisation. The only way for us to survive is to work together and grab the opportunities made available to us.” — BDLive