Proudly SA: Vehicle sector gearing up to put tiger in economy's tank
JOHANNESBURG – Some two weeks ago, Toyota SA announced a massive new investment into the country at the company’s HiAce Ses’fikile minibus taxi plant in Durban.
This almost R500 million investment will create 80 more direct jobs which, given the level of automation in the car manufacturing process, is a bonus.
In addition to ramping-up production, Toyota SA has taken the local content component of the HiAce from 38 percent to 44 percent, representing a R422m contribution back into the country.
The automotive sector in South Africa accounts for 113 000 direct jobs and its value chain beyond car bodies and components is extensive. For this reason, the sector is one of the focus industries for the Department of Trade and Industry in which it is assisting all role players with the drafting of a sector specific master plan.
The automotive sector’s master plan is already well defined, chasing an ambitious goal of South Africa becoming the manufacturer of 1 percent of all vehicles worldwide by 2035. This would take us from producing 600 000 units a year to 1.4 million.
Proof that investment begets investment, on the back of Toyota’s announcement Bridgestone tyres made its own commitment, seeing that there will be more taxis on the road and a larger consumption of tyres. They have, therefore, pledged a R700m investment into their Midrand plant.
Bridgestone currently manufactures 1.5 million tyres between its Brits and Port Elizabeth plants. The current minibus taxis on our highways and byways consume a million tyres and so there is clearly scope for growth and expansion.
We also noted that Bridgestone recently opened a brand-new head office, also in Midrand, and we hope that they remembered to procure their fixtures, fittings, furniture and all their consumables from local companies.
Bridgestone has also pledged to work on the development of a new tyre, bearing local South African conditions in mind, and with the objective of improving road safety.
This agility and flexibility in research and development, and production that locally-based companies can demonstrate, give them a distinctive competitive edge over imported items, in this case over tyres designed for fewer kilometres between changes and overall better road conditions overseas than some of South Africa’s outlying rural routes.
This reminds me of a recent visit we took to Lasher Tools, which is similarly in touch with very specific African market conditions, and this story also relates to tyres, only this time on wheelbarrows.
Lasher has adapted its output, fitting certain tyres for its sales to areas with deep, sandy terrain, swopping their production to non-puncture tyres for those barrows used in bushland where elephant thorns would pierce conventional rubber tyres.
Just another example of local things made for local people. I went last week and gave a presentation to the National Association of Automotive Manufacturers of South Africa (Naamsa).
We are planning early in the new year to convene a sector specific forum for all stakeholders in the automotive industry, much the same as we did for poultry, pharmaceuticals, clothing and textiles, the creative arts and furniture.
We will call on the government to increase the uptake in the procurement of government fleets, emergency service vehicles including ambulances, national and metro police cars as well as buses (bus bodies already have an 80 percent local content threshold under the terms of the PPPFA).
In the private sector, if all shuttle and transport services, car rental companies, courier and security operators and promotional and marketing branded cars were to be local models, imagine how we could drive up demand.
Of course, some of those at the Naamsa meeting represented importers of vehicles, but we did emphasise that they can participate in localisation programmes through their dealerships and after sales sites, with furniture, uniforms, stationery, etc, and many confirmed that they are already doing this, and despite being importers of finished cars employ many thousands of South Africans.
It is said, and Minister of Trade and Industry Ebrahim Patel quoted this in his budget speech earlier this year, that “we do not produce what we consume, and we do not consume what we produce”.
This is something that we as South Africans would do well to change, including in the automotive sector, but extending this to all our purchasing decisions.
Only by increasing production and consumption of local goods can we create much needed jobs.
Staying with the automotive theme, my song this week is Brown Dash’s Vum Vum – we need to rev this economy back to life, but the power to steer and drive its performance to a higher gear is in our hands with our purchasing decisions. All puns intended.
Eustace Mashimbye is the chief executive of Proudly South African.