CAPE TOWN, South Africa – As much as R60-billion could be invested in the South African vehicle and vehicle component industries through the next five years – R40bn in direct investments by the seven vehicle manufacturers, R20bn into component making.
The news came from Andrew Kirby, president of the SA automakers’ association and president and CEO of Toyota SA Motors, during his keynote speech at the association’s annual conference at the Kyalami Conference Centre – part of a festival of motoring.
Kirby said the windfall could involve R40bn in direct investments by the seven local automakers and R20bn into component manufacture.
Kirby said that the local auto industry was not only leading the drive to grow SA’s industrialisation but was also a major employer – 407 000 people working directly in various aspects of the industry.
‘GET COMPETITIVE’ – OR ELSE
That figure, he added, grew to 1.4-million if those involved either directly or indirectly in the overall automotive industry were included.
The industry, he added, had a positive balance-of-trade account if the number of exported built-up vehicles and components were included. However, he stressed the importance of being globally competitive in cost, quality, and supply reliability as other countries were eyeing SA’s automotive export markets.
Major developments were, however, required in the three sectors of the value chain. Automakers should embrace advanced manufacturing tech to boost productivity and quality; the component sector should urgently develop Tier 2 and 3 suppliers, and dealers and retailers should transform and uplift the informal sector.
“Growing production volumes, increasing localisation significantly, and using the latest technology in all aspects of the business,” he urged, ”are vital to transform the industry so output should grow from the 610 000 vehicles made in 2018 to 800 000 in 2023,
“We expect local procurement to grow by R12.6bn in the next five years together with a 14% increase in direct employment, which equates to creating another 16 000 jobs, mainly in the component manufacturing sector as local content grows from 39% to at least 42%.”
‘TIME TO MAKE OUR OWN STEEL’
Kirby stressed the importance of collaboration between the various vehicle and component manufacturers to enable cost-effective localisation. Already, 10 joint projects had been identified. Raw material beneficiation – such as making automotive-grade steel in SA – were another priority.
The SA steel industry is apparently investigating this.
Kirby emphasised that besides increasing localisation and direct employment the industry was committed to establishing 500 Tier 2 and 3 suppliers, with 130 of them black-owned.