Eastern Cape to launch automotive cluster early in 2012

The Eastern Cape is home to four of the country's original equipment manufacturers (OEMs) - General Motors, Volkswagen, Mercedes Benz and Ford. The local supply chain consists of some 80 major automotive suppliers with 1 500 companies in the whole automotive value chain employing 30 000 workers in areas ranging from manufacturing to service station operations. In addition, the OEMs employ 10 400 workers bringing the total auto sector related employment in the Eastern Cape to some 40 000 workers.

Jonas said that leading up to the joint public-private sector initiative, a series of meetings would be held between 16 and 20 January with key players in the automotive sector to agree on an agenda that focused on logistics, skills, research and development, supplier development, localisation and incubation.

Logistics a major concern

He said recent meetings with OEMs, key component suppliers and industry associations had shown there was widespread support for the establishment of an auto cluster in the Eastern Cape. "Logistics was singled out as the key competitive disadvantage of the Eastern Cape and South African automotive sector in general. The cost structure of the local logistics system, in terms of port charges in particular, was identified as being significantly higher than elsewhere."

In addition, key connectivity needed to be enhanced in three critical corridors - Port Elizabeth-Gauteng, East London-Gauteng and East London-Port Elizabeth. Internal connectivity between Uitenhage and the port of Ngqura was another critical area as was the expansion of the port of East London.