Masterplan to boost car parts makers
Vehicle manufacturing switch to 60% local content expected to double employment
THE National Association of Automotive Component and Allied Manufacturers (Naacam) expects better growth for the components manufacturing sector under the guidance of the SA Automotive Masterplan 2035.
The plan has several objectives, including a localisation ratio of 60% and doubling employment in the sector by 2035.
Naacam president Ugo Frigerio said the masterplan prompted the industry to determine what it wanted to achieve by 2035 and forge a bridge to that point.
“The bridge sits with the six pillars of the masterplan. We should now execute against those pillars. What is good is that all stakeholders worked together.”
Naacam executive director Renai Moothilal said much of the past two years had been spent developing the masterplan.
“We had a positive outcome from the process as policies had to be reshaped significantly to increase the demand for South African components. It was a way to drive the manufacturing value proposition,” said Moothilal.
Moothilal said the conversion from what has been an incentive for assembly to factoring in localisation involved a change in perceptions of domestic sourcing.
“The increased rewards linked to duty credits for value addition will benefit component manufacturers. This will kick-start economic activity in the value chain and help unlock some of the opportunities around transformation and employment,” he said.
However, Moothilal said Naacam did not view Africa exclusively as a trade partner.
“We need to play a role in assisting other countries to industrialise and become part of regional value chains,” he said.
The Department of Trade and Industry was leading engagements involving the Association of African Automotive Manufacturers to develop an African industrialisation pact which would help African countries achieve this.
“This would build a business case for South African component manufacturers to invest and do business in their countries. And it would be a key element in unlocking African opportunity as opposed to the African market,” said Moothilal.
Frigerio stressed that South Africa did not want to go into the continent with the approach of being more advanced, but would rather engage to unlock opportunities.
The 2019 Naacam Show 2019 held at the Durban ICC this week attracted a wide base of exhibitors, including established assemblers, foreign and domestically owned tier 1 component manufacturers and black-owned manufacturers.