The South African automotive industry should have its first glimpse of the strategic direction of the Department of Trade and Industry’s (DTI’s) new automotive master plan in the first quarter of 2017, says National Association of Automobile Manufacturers of South Africa (Naamsa) president Mike Whitfield.
Whitfield is also the Nissan Group Africa MD.
He says the objective of the master plan is to develop a policy that will run from 2021 to 2035, providing long-term certainty for the industry.
The current government support programme, the Automotive Production and Development Programme (APDP), kicked off in 2013 and comes to an end in 2020.
Technical TeamThe DTI has appointed a technical team that is engaging various key stakeholders, including vehicle manufacturers, components suppliers and organised labour, as part of its in-depth research, says Whitfield.
“My Naamsa colleague Jeff Nemeth and I are part of the oversight committee with the Minister [of Trade and Industry], and the technical team is already well involved in the work and reporting back regularly.”
Nemeth is Naamsa VP and also Ford Motor Company sub-Saharan Africa CEO.
Whitfield says the fact that the DTI has already embarked on drafting a post-APDP policy, provides vehicle and components manufacturers with “certainty in our future planning”.
“Our industry is an industry of long-term investment.”
He says Nissan is set to start production of a new model, or models, at its Rosslyn plant in 2018, continuing “well into the 2020s”.
Creating More JobsApart from focusing on attracting higher levels of investment, the post-2020 plan seeks to secure higher exports from South Africa and “much deeper localisation”, while also targeting the development of black-owned components suppliers – all of which should create more jobs in the South African manufacturing sector.
The master plan will also, for the first time, include motorcycles.
Whitfield notes that the APDP will not reach its production target of 1.2-million made-in-South Africa units by 2020, owing to the lingering effects of the global economic crisis and the slowing domestic economy.
The revised target is 900 000 units.
Production reached 615 000 units in 2015 and is expected to increase to 630 000 units in 2016, says Whitfield.
Investment by South Africa’s seven major auto manufacturers totalled more than R24-billion over the last four years. In 2015 alone, this figure was R6.6-billion, with investment of R7.6-billion expected in 2016.
On the jobs front, higher production has created 1 200 new jobs over the last 15 months, says Whitfield.