SA automotive manufacturing long-term planning, growth supported by policy

27th March 2020 By: Schalk Burger - Creamer Media Senior Contributing Editor

SA automotive manufacturing long-term planning, growth supported by policy

RENAI MOOTHILAL Industry and labour are key to ensuring long-term improvements in shop-floor competitiveness, and can be useful in a range of emerging supplier development contexts
Photo by: Donna Slater

The National Association of Automotive Component and Allied Manufacturers (NAACAM) has been part of the fabric of the South African automotive manufacturing landscape for over 40 years. In that time the sector has evolved from a highly protected, inward-focused production base that exclusively served domestic market needs into a great example of a South African manufacturing sector in step with global requirements, and a dominant, competitive producer of automotive products on the African continent, says NAACAM executive director Renai Moothilal.

There is no doubt that the growth of the sector has been on the back of a supportive industrial policy implemented by the South African government, and today it is commonplace to see vehicles and components produced in our country leaving on ships destined for major markets across the globe. That policy has been through various iterations, with the most recent one being policies linked to a South African Automotive Masterplan 2035, he says.

The long-term planning certainty it induces is positive, and an example of where State support for a value adding sector has cross cutting economic benefits. With more than 100 000 direct manufacturing jobs, it is crucial to South Africa’s re-industrialisation plans.

The last Australian automotive plant closed in 2017, as a direct result of the government there removing similar policy support levers. It is doubtful whether South Africa’s economy could cope with the mass job cuts that would arise without supportive policy, he highlights.

However, with such support comes business’ increasing responsibility to find more ways of creating economic opportunities for the wider South African populace.

“When we talk about the importance of ensuring deep localisation and increasing the transformation rates in the sector, it is about finding ways to ensure the sector continues receiving this crucial level of State support by being a value adding partner in the economic development journey.”

To that extent, NAACAM has expanded its service offering to assist members to find creative ways of taking advantage of new localisation opportunities that come about as a result of policy pressures, deepen their own base of lower tier supply, and increase the pool of South African, black-owned businesses that enter this very complex manufacturing chain, says Moothilal.

The association has positioned itself as not only a voice of the component manufacturers, but also a partner in a range of competitiveness improvement initiatives. A recent example is the in-house administration service provided out of the NAACAM office to the Automotive Supply Chain Competitiveness Initiative (ASCCI).

This jointly funded partnership between government, through the Department of Trade, Industry and Competition, industry and labour is key to rolling out activities that ensure long term shop floor competitiveness improvement, and can be useful in a range of emerging supplier development contexts.

“It is our view that targeting the dual goals of greater localisation and transformation in the sector will guide NAACAM activities in the foreseeable future, and this is no different to the other partners we work with. Ultimately, it is in all our interests to see the objectives of the South African Automotive Masterplan 2035 achieved. The NAACAM office is always available to engage with members and interested stakeholders on how this can be better achieved,” concludes Moothilal.

Story highlights:

* The South African automotive manufacturing industry is a great example of a sector in step with global requirements.

* Greater localisation and transformation in the sector will guide NAACAM activities in the foreseeable future.