There are great opportunities for South Africa to expand the capacity of its automotive components sector; however, genuine discussion is required on whether it is viable for South Africa to con- tinue manufacturing vehicles locally, says targeted consulting and implementation skills provider Rifle-Shot Performance Holdings CEO Ian Huntly.

“South Africa should possibly consider developing a niche automotive manufacturing sector instead of competing in the general automotive market, as it continues to struggle to carve out a unique identity in a majorly competitive environment,” he argues.

These niche automotives could include the manufacturing of specialised vehicles, such as ambulances and fire trucks, notes Huntly, adding that it is in the low-volume high-value-add area where a potential niche market exists for South Africa’s automotive industry.

Additionally, he says that the Asian manufacturers, such as China, Japan and South Korea, are manufacturing vehicles on a massive scale, which South Africa is unable to replicate.

Huntly points out that South Africa possesses many of the raw materials that are required for the manufacturing of automotive components, such as chrome, platinum and iron-ore. It is also in favour of beneficiation, whereby the raw materials are processed locally for the manufacturing of components.

He says challenges are not limited to the cost efficiency of the manufacturing process – they also include the reliability of delivery and the quality of the product.

“South Africa could significantly improve its levels of delivery reliability and the quality of its automotive components, as the advantages it clearly has would otherwise be offset, to some extent, by its inability to match the cheaper prices offered by some of the Asian exporters,” Huntly explains.

Clean Fuel Concerns

In September last year, Engineering News reported that the South African government’s roadmap to cleaner fuel, released in March 2011, stated that the country must be compliant with the Clean Fuels 2 specifications by 2017.

The Clean Fuels 2 specifications aim to reduce the aromatic and benzene content of fuel so that it will be in line with Euro 5 emissions standards by 2017. The specifications include the reduction of sulphur from 50 parts per million (ppm) to 10 ppm, the lowering of benzene from 5% to 1% of volume, the reduction of aromatics from 50% to 35% of volume and the specification of olefins at 18% of volume.

European Union countries are already implementing Euro 6 emissions standards for light passenger and commercial vehicles and South Africa should strategically aim to keep pace with the global trend, Huntly points out.

However, he says, vehicle manufacturers in South Africa cannot, at present, manufacture vehicles that use Euro 5 or Euro 6 fuels, while importers are also prevented from carrying their complete range of automotive vehicles, as only Euro 3-grade fuels are avialable in South Africa.

Although Huntly is aware that fuel refineries in South Africa are spending about R40-billion on upgrading their systems to meet Euro 5 standards, he believes that they should, instead, be directly upgrading to Euro 6 standards.

“This will put the country in a position to use the latest technologies and manufacture and import the latest ranges of low-pollution fuel-efficient vehicles for local use and export,” he says.