SA industry vs emerging markets

Otherwise it will become an automotive backwater, according to Prof Garel Rhys, Director of the Centre for Automotive Research at the University of Wales and one of the world's foremost industry commentators.

He believes the emerging markets of China, South East Asia and Eastern Europe will have a “profound effect” on the South African automotive industry.

After many false predictions, the motor industry is at last exploding into new markets which in 20 years will account for more vehicle production than the traditional centres of production in the triad of North America, Western Europe and Japan. “This will also have a profound impact on the long established, but more marginal vehicle making countries like Australia and South Africa,” said Rhys.

“The challenge posed by the emerging major industries in China and India, but also Thailand, Brazil and Russia, affects not only the 'triad' but also countries like South Africa, Argentina and Malaysia.”

He added that the South African automotive industry must integrate with the global activities of the vehicle manufacturers and component suppliers. In this way it can become the centre of, and responsible for, various products and projects.

These products must be made for a wider market than South Africa, so that sufficient economies of scale can be achieved to establish a cost base that allows profits to be made at competitively determined prices.

Rhys said: “If South Africa is to retain and grow its vehicle supply sector the operations must offer products of high quality at globally determined prices. After all, it is much easier to transport components around the world with low transport costs than vehicles.”

The question of whether the South African automotive industry is equipped to take on the threats and opportunities presented by emerging markets will be addressed at this year's South Africa Automotive Conference (SAAC) in Johannesburg on 8 - 9 May 2007.

A line up of international speakers will address the need to find new solutions to the problem of how to survive in a global market. These include Prof Rhys, Andrew Chien, president and managing director of Ricardo Strategic Consulting, Ashvin Chotai, Asia specialist for Global Insight, John Boley, communications director of the World Cargo Association based in Bangkok, Dr Henry Grimbeek director, corporate services - Nissan South Africa, and Kobus van der Wath, managing director of The Beijing Axis, business director of South Africa China Business Association as well as vice president of Asia Pacific South Africa Chamber of Commerce.

Further details of the South Africa Automotive Conference, being held at the Emperors Palace Convention Centre, Gauteng, see: http://www.saac2007.com