Transformation of the automotive industry is not negotiable, said minister of trade and industry, Rob Davies.
Speaking at the inaugural National Association of Automotive Component and Allied Manufacturers (NAACAM) Show earlier this week in Durban, he said that transformation was crucial as it could lead to advanced and inclusive growth of the manufacturing sector and government would therefore “make supply side support conditional to industry transformation”.
Department of Trade and Industry (dti) spokesperson, Sidwell Medupe, told FTW Online that this meant that any organisations or sectors who received incentives or subsidies from government would have to be representative of the national demographics profile, be in line with BEE requirements and “must drive transformation”.
According to Davies, component imports have surged to historical levels (at R50 billion), while local content in vehicles has dropped to below 39% and auto component employment has become fairly idle.
“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 product (GDP) 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,” he said.
Davies pointed out that further localisation would result in additional jobs.
NAACAM president, Dave Coffey, added that the automotive industry had the capability to address the challenges facing the economy and stressed the importance of investment, technology and supporting development of key policies.
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