SA postpones launch of automotive master plan to July 2021

The launch of the SA automotive master plan, which will govern the local motor industry from 2021 to 2035, has been postponed for six months.

The National Association of Automobile Manufacturers of SA (Naamsa) said this week that the plan, which was due to be launched on January 1, will now start in July.

Vehicle and components companies have been telling the government for months that they would not be ready by January. Instead of preparing, they have spent much of the year in crisis mode, dealing with the impact of Covid-19 and the after-effects of lockdowns, including a collapse in domestic and export sales.

The government has also been distracted and has yet to finalise how the plan will work. Despite announcing the general structure more than two years ago, it has not come up with the operational details. Naamsa president Tim Abbott said the government would use the delay to do so.

He said the department of trade, industry and competition is expected to publish documents officially delaying the master plan during December.

The department and the minister, Ebrahim Patel, were approached for comment but had not responded at the time of publishing.

Naamsa CEO Mike Mabasa said he is very pleased with

“” the postponement. The master plan calls for a major reappraisal of the motor industry, both of its scale and the way it operates. Targets include a doubling of jobs in vehicle and components manufacturing by 2035, from 120,000 to 240,000; and a more-than doubling of vehicle production from 2019 levels, from 600,000 to 1.4-million.

As well as these, the average value of local content in SAmade vehicles is intended to rise from 40% to 60%. Together, it is hoped these initiatives will create the scale to enable mass entry into the predominantly white industry by black industrialists and entrepreneurs. Vehicle manufacturers have established a R6bn transformation fund to nurture black newcomers, mainly in components manufacture, logistics, services and motor dealerships.

All these targets, however, were set before Covid-19. In 2020, thousands of jobs have been lost, production has plummeted and, in many cases, transformation has played second fiddle to survival. It is estimated that domestic new-vehicle sales won t recover to 2019

’ levels (itself a shrinking market) until 2022 or 2023.

Latest sales figures, published on Tuesday, give an idea of the challenge. The motor industry sold 39,315 cars and commercial vehicles in November

— 12% fewer than the 44,670 of November 2019.

As a result, earlier forecasts that the full-year market will be about 30% weaker than 2019 are looking correct. Aggregate sales to the end of November 2020 totaled 343,276. That was 30.6% below the 494,929 at the same time in 2019.

November vehicle exports totaled 31,966, 7.6% behind 2019 s 34,588. For the year to

’ date, however, they are 32.9% in arrears down from 373,532

— to 250,545.

The government also has a role in developing the master plan. It is required to fix SA s

’ dismal transport infrastructure, particularly the misfiring ports and railways. It also has to help tear down continental trade barriers and create conditions for a pan-African automotive pact that will help the SA motor industry grow.

The plan was to be launched in January