South African car industry economic transformation plan revealed

South Africa’s vehicle manufacturers are to create a transformation fund that would allocate funds to develop black ownership in the supply chain and vehicle dealership network. The industry has also developed a vision and master plan to 2035.

Details of the transformation fund and the master plan were disclosed at a media briefing recently that was addressed by ANC treasurer-general Zweli Mkhize and several industry executives. The briefing follows discussions between the parties ahead of the ANC’s policy conference.

Mkhize said there was a much better understanding of radical economic transformation in the automotive industry than in other sectors.

He said there was much scepticism about radical economic transformation, but the ANC believes there had to be a new way of doing business in South Africa, and “the leadership in this sector have openly embraced that approach”.

Mike Whitfield, the president of the National Association of Automobile Manufacturers of South Africa (Naamsa) and the managing director of Nissan South Africa, said the growth of the automotive industry was a tribute to the interaction between the various stakeholders and the stable policy environment.

“It’s one industry we cannot afford to ever take a step backward in. If you look at Australia, where policy and the industry did not align, it fundamentally does not have an assembly industry anymore,” he said.

Andrew Kirby, a Naamsa member and president and the chief executive of Toyota South Africa Motors, said the industry had recognised the need to play a more active role in supporting industrialisation and in solving some of the country’s challenges.

Kirby said one critical element they recognised was the need to develop a fund that supported transformation in the industry, and they had developed a vision and a master plan with targets they aimed to achieve by 2035.

He said these targets included increasing total annual manufacturing volumes from 600 000 to 1.4 million vehicles and local content levels in domestically produced vehicles from 38 per cent to 60 per cent, and doubling employment in the industry and the number of black-owned enterprises.

Tim Abbott, another Naamsa member and the chief executive of BMW Group South Africa and sub-Saharan Africa, said the major original equipment manufacturers (OEMs) in South Africa had come together to work out a long-term plan for the industry.

Abbott said the transformation fund would be held through a black fund manager with a board of management that included OEMs and the government through the Department of Trade and Industry.

He said money would be allocated to develop black ownership in the supply chain and of vehicle dealerships, and black-owned companies would also receive support with management.