Achieving 60% local content on vehicles assembled in South Africa will make a significant impact on the South African economy, including the creation of 49 000 new jobs and an additional R68-billion in gross domestic product, says Automotive Masterplan lead and B&M Analysts chairperson Dr Justin Barnes.
Speaking at the National Association of Automotive Component and Allied Manufacturers of South Africa (Naacam) show held in Durban earlier in this month, he said an Automotive Masterplan was at an “advanced stage of development” and that more concrete details would be shared over the coming weeks.
The Automotive Masterplan is set to replace government’s current automotive industry support programme, the Automotive Production and Development Programme (APDP), when it comes to an end in 2020.
Naacam president Dave Coffey noted that it had been accepted by industry role-players that there was a need to increase local content in manufactured vehicles from its current level of 38.5% to 60%.
“Given the fact that approximately triple the number of jobs are created in components manufacturing than in vehicle assembly, there is commitment across the board to deepen levels of local content. This responsibility falls as much with Tier 1 components manufacturers as it does with [vehicle manufacturers].”
Trade and Industry Minister Dr Rob Davies reaffirmed government’s support for the automotive sector.
“I was really pleased to see a vast array of components suppliers at the show, showing the depth and breadth of the supply chain, including black industrialists, a number of whom have entered the space with support from [vehicle manufacturers] and large Tier 1 suppliers,” he added.
Davies said any beneficiary of future automotive policies would need to demonstrate contribution to black-supplier development and localisation, which was “central to dealing with stubbornly high unemployment levels”.
Coffey added that all South African automotive role-players understood that transformation and the inclusion of black-owned suppliers in the value chain were not negotiable.
“There is a renewed sense of urgency and a move to action in this regard, which is significant. It is not business as usual.”
Toyota South Africa Motors president and National Association of Automobile Manufacturers of South Africa representative at the show Andrew Kirby said he was encouraged that the industry had gained alignment “in the overall picture of the masterplan and the acceptance of its key targets for the sector”.