TRANSFORMERS

Plans to expand SA’S automotive sector won’t succeed unless the government gets to grips with the country’s deteriorating infrastructure and lack of vision

Have you ever seen a bewildered robot? Well, thanks to Eskom’s rolling blackouts, we now know. Whenever the utility shuts off power to SA’S vehicle assembly plants, backup power supplies kick in almost instantaneously. But that fraction of a second delay is enough to render useless hundreds of manufacturing robots on welding lines, in paint shops and wherever else they are required to provide the consistent, world-class quality that humans can’t.

With no memory of where they were a moment before, they halt mid-action. A robotic arm will occasionally twitch, reach out without knowing why, then freeze.

It can take up to two hours to recalibrate robots. They have to start all over again which, in some plants, means a quarter of a day’s vehicle production is lost in a flash.

So it’s no surprise to hear Michael Sacke, CEO of truck and bakkie producer Isuzu Motors SA, suggest that while there is considerable merit in the government’s longterm development plan for the SA motor industry, it will go nowhere until basic economic building blocks are put in place.

At the end of 2018, trade & industry minister Rob Davies announced that the 20132020 automotive production & development programme (APDP) would be extended to 2035. By then, the aim is to double vehicle production, double employment, grow the use of Sa-made components by at least 50% and dramatically increase the number of black-owned companies in the industry.

These are all admirable goals, but Sacke warns: “Sometimes in SA we want to run before we can walk. We talk about things like the fourth industrial revolution, but first we need basic infrastructure and water and electricity and education. We are so worried about high-end goals that sometimes we forget about achieving the basics.”

Power generation is the obvious current example. “We want to attract investors but we can’t guarantee them electricity,” says Sacke. “If they want to come here, they have to create their own, through generators and solar power. It’s a cost they don’t have to

worry about in other countries with which SA competes for foreign investment.”

Perhaps dimly, the government seems to acknowledge this challenge. The post-2020 APDP, managed by Davies’ department, will be part of a broader strategy called the SA automotive masterplan. One of its pillars is the improvement of infrastructure.

“We have never really targeted that in automotive policy before,” says Toyota SA CEO Andrew Kirby, who is also president of the National Association of Automobile Manufacturers of SA.

“But if we don’t get that right, we can’t reach our other goals,” he adds.

Energy security is only one element. There’s also the upgrading of transport infrastructure like road, rail and ports. Despite government promises to provide the motor industry with support, this hasn’t happened. Instead, it has gone backwards.

Durban, supposedly SA’S main harbour for vehicle exports, is so clogged that Ford Motor Co of Southern Africa’s assembly plant in Silverton, Tshwane, has begun to ship vehicles out of Port Elizabeth. That means transporting them twice as far overland. CEO Neale Hill describes Durban as “throttled”.

Hill agrees with Sacke that the motor industry can achieve only so much on its own. Besides infrastructure, the government must take bold steps on overall industrial strategy.

For example, Hill says it makes no sense for SA to export raw materials like iron ore and platinum — core requirements for the motor industry — for beneficiation overseas.

“These minerals are beneath our feet but we see them only when they return as imported, finished products,” he says. “We could make big leaps in local content if only we do something about the value chain.”

Kirby points to plastics and polymers as materials that could be “localised” with the right strategy. It’s an idea that is particularly important at the moment, following a change

What it means:

Automotive is the poster child for SA’S reindustrialisation strategy and basic infrastructure is vital