Transformation of the Automotive Industry Not Negotiable

Transformation of the automotive industry can lead to an advanced and inclusive growth of the manufacturing sector and is therefore not negotiable. This was said by the Minister of Trade and Industry, Dr Rob Davies during the inaugural National Association of Automotive Component and Allied Manufacturers (NAACAM) Show and Localisation Indaba in Durban International Convention Centre today.

According to Minister Davies, the transformation will ensure that the automotive industry is representative in line with national demographics profile; Government will therefore, make supply side support conditional to industry transformation. While discussions are continually unfolding on developing and growing the domestic automotive component industry towards its objectives of higher levels of localisation, employment creation, and improved competitiveness; Minister Davies said that it must be noted that its’ transformation is as important and cannot be negotiable.

“This industry is vital to South Africa’s industrialisation, specifically and most importantly to the manufacturing sector of the economy. The industry’s contribution to Gross Domestic Production is estimated at 7.5% with 113,000 people directly employed in the vehicle assembly and components supply industry. Importantly 82, 000 of this total employment figure are directly employed in the auto component industry,” said Minister Davies.

With the correct support, Minister Davies said the industry can create the much needed jobs. He added that, the more the degree of localisation, the more the jobs.

According to Minister Davies, component imports have surged to historical levels at R50billion; local content in vehicles have declined to below 39% and auto component employment has remained a concern as it has somewhat stagnated and needs to be addressed.

“Through the 2035 SA Automotive Masterplan (SAAM) process, we are seeking to arrest some of the APDP drawbacks whilst also ensuring that the long trajectory of industry growth is ensured. This Masterplan process is also making us realise that to ensure the long term sustainability of the automotive assembly and component industry, all the partners which include; government, industry and labour have to make sacrifices.,” said Minister Davies.

The President of NAACAM Mr Dave Coffey said that the automotive industry has the capabilities of addressing the challenges that are facing the economy. He said that investing in value addition to the products; keeping up with the technologies; supporting the development of key policies of the industry can really be a shot in the arm for the industry. He added that 181 companies are exhibiting in the show and 34 were black owned.

The NAACAM Show is anchored by two key developmental themes, being localisation and black supplier development, and these can be seen as strong features in both the conference programme as well as the exhibition.

Distributed by APO on behalf of Republic of South Africa: Department of Government Communication and Information.