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TEDA: Unlocking and Driving Tshwane's Automotive Industry Growth and Investment

24th July 2023

     

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This article has been supplied as a media statement and is not written by Creamer Media. It may be available only for a limited time on this website.

Tshwane, South Africa’s capital city is rapidly emerging as a hub for the country's automotive industry. With its strategic location in the economic heartland of the country, Tshwane boasts a thriving business landscape, hosting numerous multinational companies, 30 international organisations, and 134 embassies—a testament to its international influence.

At the core of Tshwane's economic strength lies its automotive sector, which is experiencing remarkable growth and investment opportunities. The Tshwane Automotive Special Economic Zone (TASEZ), established by the Tshwane Economic Development Agency (TEDA), has played a pivotal role in propelling the city's automotive industry forward. In its initial phases, TASEZ alone contributed over R15 billion to Tshwane's economy and created more than 2,388 jobs, with further phases set to generate additional employment and attract more investments to the city.

South Africa Automotive Master Plan (SAAM) Vision 2035

Under the South Africa Automotive Master Plan (SAAM) Vision 2035, the government has laid out a blueprint to fuel the sector's expansion, targeting increased investment through localisation and integration into global supply chains. Tshwane stands out as a driving force behind this vision, housing the largest concentration of Original Equipment Manufacturers (OEMs) and Tier 1 and 2 suppliers in the country and the continent.

The significance of Tshwane's automotive prowess becomes evident when considering that it accounts for over 40% of South Africa's passenger, medium, and heavy vehicle production. Global automotive giants such as BMW, UD Trucks, Nissan, Volkswagen Amarok, Ford, and Tata have established their production plants within the city, cementing Tshwane's status as an automotive manufacturing powerhouse. Additionally, Tshwane is home to five of the nine automotive OEMs in the country, along with a substantial concentration of Tier 1 and 3 components suppliers and has two automotive supplier parks in the region.

TASEZ offers an array of enticing incentives for businesses, including a 15% corporate tax rate, purpose-built facilities, employment incentives, customs-controlled areas, and the 12i Tax allowance. This comprehensive package supports various opportunities within the SEZ, ranging from vehicle assembly for OEMs to components manufacturing, metal forming and pressing, chrome plating, welded assembly, advanced logistics, and mixed development. TASEZ also promotes the use of green energy sources, aligning with Tshwane's commitment to renewable energy adoption.

The Automotive Supplier Park (ASP) is an industrial park based in Rosslyn in the northern part of Pretoria. The park spans 130 hectares and houses a tenant pool comprising mainly of component manufacturers and suppliers to OEMs.  Automotive component manufacturers, suppliers and service providers benefit from the synergies and cost saving opportunities created by the locality of the   Automotive Supplier Park.  The AIDC develops factories to tenant specification on a long-term lease basis.  The ASP is a benchmark project for our country and the continent at large and has contributed significantly to the global competitiveness of the South African automotive industry.

Renewable Energy key to Automotive Sector

The country’s energy sector is undergoing impactful transformation – moving from traditional fossil fuel power to renewable energy (solar power; wind, biomass, etc). Acknowledging the significance of renewable energy in reducing carbon emissions and bolstering competitiveness, the City of Tshwane has adopted a Climate Action Plan aimed at achieving a 50% reduction in emissions by 2030. Tshwane's efforts to embrace green technologies extend to the automotive sector, as demonstrated by the successful partnership between Bio2watt and BMW. Bio2watt supplies BMW with green energy generated from waste, showcasing Tshwane as a pioneer in sustainable practices.

In response to concerns raised by the automotive sector regarding logistics and cargo movement, Tshwane is collaborating with the provincial government and various stakeholders to address these challenges. The Tshwane freight and logistics hub project, strategically located near TASEZ, Tshwane Automotive City, and Wonderboom Airport, will alleviate these constraints by facilitating rail transportation for exports to ports nationwide.

Collaboration key to success of automotive industry in South Africa

TEDA, while serving as a reliable guide for investors seeking to capitalise on the city's boundless opportunities, is aware of the pivotal role collaboration plays in championing the success of South Africa as an automotive powerhouse in Africa. Partnership between the government, private sector, research institutions, and academia, along with cooperation between provinces and cities, will ensure an ecosystem for skills development, innovation, and growth-geared capacity building needed to drive success of the automotive industry.

As we countdown to the NAACAM Show 2023 in August we are excited to see the industry coming together and showcasing the capabilities of the domestic automotive component manufacturing sector.  The Show is dedicated to exploring the future of the automotive component manufacturing value chain and fostering innovation within the industry.

To register for NAACAM Show 2023 click here

Edited by Creamer Media Reporter

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