The loss of its motor industry would be “devastating” to South Africa. The industry is directly responsible for half a million jobs and nearly one million in total when taking into account employment in service and support sectors that make money from automotive activities, says a report by Econometrix.The GDP of the industry last year was R235-billion – 6.9% of total SA GDP.
There are more companies involved in vehicle manufacture than most people might imagine. Besides the seven long-established manufacturers – BMW, Ford, General Motors, Mercedes-Benz, Nissan, Toyota and Volkswagen — truck and bus companies with assembly operations in SA are FAW, Hyundai, Isuzu, Iveco, MAN, Powerstar, Scania, Tata, UD and Volvo.
Among components producers, 120 deliver completed components direct to local vehicle assembly lines. They, in turn, are supplied by nearly 300 smaller companies providing subassemblies built into the main components.
The report shows that at the end of 2014, the combined motor industry employed 598553 people, formally or informally. Of these, 112734 were in manufacturing of vehicles, components and coachwork. The other 385819 were in vehicle sales and repairs, and the sale of spare parts.
If the motor industry were to disappear, some regions would be particularly hard hit. In the Eastern Cape, manufacturing industry, in which automotive is the overwhelming force, made up 16% of total GDP in 2013. Of the R28.6-billion of goods exported from the province that year, one third were automotive. The region is home to Mercedes-Benz SA, General Motors SA, Volkswagen SA, a Ford engine plant and dozens of components companies.
Figures from Stats SA show that last year, automotive manufacturing sales of R199.8-billion were equivalent to 11% of total SA manufacturing sales. It is the fourth-biggest sector, after petroleum and chemicals, iron and steel, and food and beverages.
Its contribution could be even more, says Jeffrey. “We are not developing upstream or downstream industries as we should.”
“SA is not an important vehicle manufacturing country in global terms,” the report states. But, SA can benefit from a global production shift to emerging countries.
“SA’s true competitors are other medium-sized, emerging-market economies such as Mexico, Egypt and Thailand, which produce many of the same models as those produced in SA,” says the report. “However, they enjoy the advantage of lower costs and greater proximity to major export markets.
“With the intense competition the global automotive industry faces, SA must address its competitive weaknesses to compete meaningfully.”
If SA doesn’t act, or the wrong policy decisions are taken, the Doomsday Scenario – now also known as the Australian Scenario – would be crippling. — Tiso Blackstar
Motor vital at every level
The GDP of the industry last year was R235-billion – 6.9% of total SA GDP.
There are more companies involved in vehicle manufacture than most people might imagine. Besides the seven long-established manufacturers – BMW, Ford, General Motors, Mercedes-Benz, Nissan, Toyota and Volkswagen — truck and bus companies with assembly operations in SA are FAW, Hyundai, Isuzu, Iveco, MAN, Powerstar, Scania, Tata, UD and Volvo.
Among components producers, 120 deliver completed components direct to local vehicle assembly lines. They, in turn, are supplied by nearly 300 smaller companies providing subassemblies built into the main components.
The report shows that at the end of 2014, the combined motor industry employed 598553 people, formally or informally. Of these, 112734 were in manufacturing of vehicles, components and coachwork. The other 385819 were in vehicle sales and repairs, and the sale of spare parts.
If the motor industry were to disappear, some regions would be particularly hard hit. In the Eastern Cape, manufacturing industry, in which automotive is the overwhelming force, made up 16% of total GDP in 2013. Of the R28.6-billion of goods exported from the province that year, one third were automotive. The region is home to Mercedes-Benz SA, General Motors SA, Volkswagen SA, a Ford engine plant and dozens of components companies.
Figures from Stats SA show that last year, automotive manufacturing sales of R199.8-billion were equivalent to 11% of total SA manufacturing sales. It is the fourth-biggest sector, after petroleum and chemicals, iron and steel, and food and beverages.
Its contribution could be even more, says Jeffrey. “We are not developing upstream or downstream industries as we should.”
“SA is not an important vehicle manufacturing country in global terms,” the report states. But, SA can benefit from a global production shift to emerging countries.
“SA’s true competitors are other medium-sized, emerging-market economies such as Mexico, Egypt and Thailand, which produce many of the same models as those produced in SA,” says the report. “However, they enjoy the advantage of lower costs and greater proximity to major export markets.
“With the intense competition the global automotive industry faces, SA must address its competitive weaknesses to compete meaningfully.”
If SA doesn’t act, or the wrong policy decisions are taken, the Doomsday Scenario – now also known as the Australian Scenario – would be crippling. — Tiso Blackstar
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