Success secrets of South Africa’s automotive manufacturing sector revealed

South Africa’s automotive manufacturing sector has achieved significant success, owing to its long-established history of automotive production and a sophisticated network of original equipment manufacturers and suppliers.

A recent webinar organised by the Automotive Industry Development Centre, titled ‘The Automotive Industry: Building on South Africa’s success and facing the challenges of the future’, shed light on the sector’s achievements and the various considerations and opportunities it must address, especially in light of the global shift towards electric vehicles.

Renai Moothilal, the Executive Director of the National Association of Automotive Component and Allied Manufacturers, attributed the sector’s triumphs to the unwavering support it received from the South African government. Government administrations have actively provided policy and incentive support, fostering a stable and conducive environment for automotive development.

One crucial aspect, according to Moothilal, is the continuous evolution of government policies that have played a key role in sustaining and expanding different segments of the automotive value chain. “The country’s production base is also technologically diverse, with a strong multinational presence across the supplier network,” he said. “Furthermore, well-established industry structures, associations, and robust engagement with organized labor further bolster the sector.”

Contributing, Professor Justin Barnes, the Manufacturing Ambassador at the Toyota Wessels Institute for Manufacturing Studies, highlighted that Africa presents a significant opportunity for the South African automotive industry.

“To leverage this potential, the country should focus on increasing its domestic market, as this is directly linked to the number of vehicles it can export, benefiting from rebates,” he said. “While South Africa has a limited number of adults who can afford new cars due to economic challenges, other African countries boast growing middle-class populations.” To tap into this market, the professor suggested positioning South Africa as a regional hub for automotive production.

In addition, Prof. Barnes proposed strategizing an African automotive pact to support growth in both traditional vehicle production and new energy vehicles (NEVs). “This alliance would create opportunities for the sector, particularly as the demand for NEVs rises,” he said.

Also at the webinar, Thandile Jack, the Senior Business Development Manager at the Coega Development Corporation, echoed Barnes’ sentiment about Africa’s potential as a market for South African vehicle manufacturers.

“The Middle East also presents a new market, especially for NEVs,” according to Jack. “NEVs represent a significant opportunity for the sector, underscoring the need for the country to reposition itself to meet the demand for both internal combustion engine vehicles and NEVs,” he said.

Similarly, Andile Africa, CEO of the Automotive Industry Development Centre, stressed the importance of embracing transformation, which the industry has been slow to do. “While financial resources are available for this purpose, they are not being adequately utilized,” Africa said.

As the automotive industry in South Africa navigates the complexities of transitioning towards NEVs, embracing transformation and expanding into regional markets present critical paths for sustained growth and prosperity in the future.

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