EXTENSIVE PRODUCT RANGE Bearings International is poised to cater to increased new-car production levels with its wide range of bearings and power transmission products
Increased new-car production levels, which include an expected growth in vehicle exports, are likely to drive improvement in South Africa’s automotive industry this year, says industrial equipment supplier Bearings International sales representative Cherry Slater.
“Like many other sectors in South Africa, the automotive industry is characterised by low economic growth, as a result of the weak rand, high interest rates and a fragile consumer-business relationship. Moreover, 2016 marked the third successive year of the new-car market showing a decline, with sales during the year falling 11.4% in volume, compared with those of 2015.”
However, she notes that improved capacity use was evident in 2016 and highlights that the outlook for 2017 looks far more positive, as the effects of the Automotive Production and Development Programme (APDP) become more evident and the global economy stabilises and becomes better positioned to support South Africa’s improving vehicle-export performance.
The APDP was introduced in 2013 to boost local vehicle production by offering incentives to the new-vehicle production market and South Africa’s vehicle components supply chain. The Department of Trade and Industry (DTI) predicts that, with the support of the APDP, South Africa could by 2020 be producing as many as 900 000 made-in-South Africa units a year – a vast increase from the 288 372 produced last year.
Slater highlights that the original framework of the APDP was developed in 2008, and concerns are now being raised about the limitations of the programme. Government is working on a post-APDP master plan, which will assist automotive manufacturers going forward.
“The country’s commitment to keeping this industry alive and remaining a premier supplier of high-quality vehicles and competitive original-equipment parts and accessories to international markets is clearly communicated in government’s draft master plan to promote higher motor-vehicle production.”
Despite geopolitical tensions that have arisen as a result of a lack of confidence in major advanced economies following leadership changes, Slater highlights that the global economic outlook is favourable in the sense that it lends support to South Africa improving vehicle-export performance. Such exports showed an increase in 2016, especially in Europe and Asia, although a decline in sales to African markets was still evident.
Bearings International is a preferred bearings supplier to the automotive industry, with contracts, including automotive manufacturers Toyota South Africa Motors and Dana Spicer South Africa. The company is also in the early stages of negotiating a contract with vehicle manufacturer Ford, and is aiming to expand as new-vehicle production picks up. The company stocks a variety of bearings, including KOYO, KML, FAG, INA and NACHI, as well as an extensive range of power transmission products. The company’s platinum range is also extensively used in the automotive aftermarket.
“We are a very service-driven company, with 48 branches across Southern Africa and Namibia. Our business comprises two major divisions: Parkhaven – which services automotive original-equipment manufacturers, exports and the reseller market – and Engineering – which is tasked with bearing-failure analysis, problem solving on bearing issues and other engineering assistance including plant maintenance.”
Bearings International will also welcome 30 interns this year as part of its work experience programme, which assists graduates by offering in-house training and work experience.
Engineering News reported in September that, according to National Association of Automobile Manufacturers of South Africa president Mike Whitfield, the South African automotive industry should have its first glimpse of the strategic direction of the DTI’s new automotive master plan in the first quarter of 2017.
The current APDP kicked off in 2013 and comes to an end in 2020 and Whitfield says that the objective of the new master plan is, thus, to develop a policy that will run from 2021 to 2035, providing long-term certainty for the industry.
The 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.
He highlights that 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”.
Apart from focusing on attracting higher levels of investment, the post-2020 plan also 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.