THEBE MABANGA
SOUTH African car manufacturers and automotive suppliers have urged government to delay the implementation of the South African Automotive Master Plan, which is due to kick in in January next year, arguing that the industry needs time recover from the COVID-19 shock while government has not fine tuned the regulations that will govern the plan.
The proposed postponement is for six months.
The South African Motor Industry is reeling from the devastation of the COVID-19 enforced national lockdown, with sales coming to a total halt in April this year and, as at the end of September, 35% behind the same time last year.
South Africa’s vehicle sales are heavily dependent on exports but there is currently uncertainty because the European Union, a key export destination, is currently grappling with a second wave of the coronavirus infections while Britain, the single largest destination for car exports, faces the prospect of a No-Deal Brexit at the end of this year.
“There’s nothing we can do except wait and see,” Tim Abbott, President of the National Association of Automotive Manufacturers of Sothern Africa, who is also MD of BMW SA, said following a meeting between industry executives and the Department of Trade, Industry and Competition.
The South African Automotive Masterplan aims to double car volume production from the current 600 000 units per year to 1.4 million units by 2035.
It also has in place a R6 billion fund that is meant to develop a black-owned parts supplier.
The Master Plan is set to replace the Automotive Production Development Programme, which has been in place since 2013, which evolved out of the Motor Industry Development Programme (MIDP).
South Africa has successfully used a range of incentives through a succession of programmes to lure manufacturers to set up their base in the country, either at Roslyn outside Pretoria or at East London, Port Elizabeth and Uitenhage in the Eastern Cape.
These have succeeded in attracting investment and helping South Africa maintain a strategic manufacturing capacity in the automotive.
BMW for example, exports 90% of its South African production.
Challenges to the sector include load-shedding, skills shortage and the frequent threat of labour unrest.
The Department of Trade and Industry did not respond to request for comment.
(COMPILED BY INSIDE POLITICS STAFF)
