SAAM 2035 has set a target to increase local content from 39% to 60% and to transform and deepen the automotive supply chain.
The Localisation Supermarket – both a physical showcase and online catalogue of automotive components that are currently imported and for which Tier 1 suppliers are seeking local alternatives – is giving impetus to the South African Automotive Masterplan’s (SAAM) targets to transform the automotive supply chain. According to the AIDC Eastern Cape, who initiated the project with the Eastern Cape Automotive Industry Forum, bids have been made by local companies to produce 25% of the parts listed in the Localisation Supermarket. 15 viable RFQs to supply a range of parts have been submitted to Tier 1 suppliers in the Eastern Cape, since its launch. Two of the 15 RFQs were submitted by non-B-BBEE local companies in the quest to achieve the targeted 60% local content. SAAM 2035 has set a target to increase local content from 39% to 60% and to transform and deepen the automotive supply chain.
According to the SAAM2035 report an increase in the contribution of black-owned suppliers to 25% of the Tier 2 and Tier 3 total, is achievable.
The Localisation Supermarket is both a physical showcase and online catalogue
“Every effort must be made to attain this target. If we do, an additional R68 billion in economic gross value added (GVA) will be injected into the economy, doubling the present impact of the automotive industry on South Africa’s economy and creating an additional 49 000 jobs,” the AIDCEC said.
In phase 2 of the project new parts will be added to the catalogue with plans in place to have a regular inflow of opportunities in the supermarket.
“The Supermarket among other projects, is equipping suppliers with the opportunity and partnerships, including access to funding agencies like the ECDC and IDC, that will enable them to more easily access the automotive supply chain, which has stringent quality and technical certification requirements,” the AIDCEC said.
The Eastern Cape has the largest concentration of automotive manufacturing in South Africa according to Naamsa
The Localisation Supermarket is an innovative permanent exhibition of automotive components that are not produced locally. It provides tangible and transparent access to localisation opportunities in the Eastern Cape’s automotive supply chain, for black suppliers to participate meaningfully and to strengthen the manufacturing base of the sector. The supermarket is aimed at driving localisation to widen the manufacturing base and promote inclusivity of black suppliers. Suppliers are able to view parts virtually, online and then express an interest on the platform after which the AIDC would engage eligible suppliers through a RFQ process.
“Many of the parts require a high level of technical expertise and successful suppliers need to comply with stringent international quality standards. We understand these real and valid barriers to entry and will work with qualifying suppliers to equip them to enter the supply chain, including access to finance,” the AIDC EC said.
Eastern Cape Department of Economic Development Environmental Affairs and Tourism MEC Mlungisi Gerald Mvoko said the Province’s collaboration with the AIDC and industry, including the Eastern Cape Automotive Industry Forum (ECAIF) was paying dividends.