R60-billion investment towards component manufacturing
At the recent NAAMSA Conference at the Kyalami Festival of Motoring, Andrew Kirby spoke about “How will localisation and transformation create joint prosperity and unlock growth?”
Following the positive opening address from the Minister of Trade, Industry and Competition, Ebrahim Patel, Kirby announced that R60-billion could be invested in the South African vehicle and component manufacturing industries in the next five years. As part of the local motor industries continued efforts to increase industrialisation in the country, the R60-billion can be made up from R40-billion billion in direct investments by the seven-vehicle manufacturers with an additional R20-billion going into component making.
Andrew Kirby which is both the President of NAAMSA and President and CEO of Toyota SA Motors continued to say that the number of people employed directly in various aspects of the local automotive industry could be tripled with a further increase with the addition of people indirectly associated in the industry. According to Mr Kirby, although developments have to made to the value chain with advanced manufacturing technologies being embraced, the industry is in a healthy position to increase its export market but only if the local industry stays competitive in terms of cost, quality, and reliability of supply. With global competitors on the heels of the local industry, the component sector needs to develop Tier 2 and Tier 3 suppliers and the retail sector need to transform to uplift the informal sector.
“Growing production volumes, increasing localisation significantly and using the latest technologies in all aspects of the business are vital to transforming the South African automotive industry and to this end, the aim was increase output from the 610 000 vehicles made in 2018 to 800 000 in 2023. We expect local procurement to grow by R12.6-billion in the next five years together with a 14% increase indirect employment, which equates to creating another 16 000 jobs, mainly in the component manufacturing sector as local content grows from 39% to at least 42%,” Andrew Kirby, President of NAAMSA and President and CEO of Toyota SA Motors
According to Kirby, although the local steel industry is currently investigating the potential to manufacture automotive-grade steel, it is also import that collaborations are formed in between vehicle manufacturers and component manufacturers.
