SA may make parts for Japanese cars

Rob Davies (Image: GCIS)

Japan is looking at an alternative country to produce components after the destructive tsunami, which devastated industry in Japan a few years ago and heightened the vulnerability of the country's motor industry because component production was severely disrupted. This affected manufacturers' worldwide operations, which depended on supplies from Japan.

Davies said at a media conference that the effect of the tsunami led to the realisation that Japanese motor manufacturers needed to establish more centres of production for automotive components outside Japan. Toyota, for instance, was planning to establish a component supplier park in the vicinity of its factory in Durban.

The automotive component sector was one of the areas of focus of a joint Japanese-South African study on how the presence of Japanese investors in SA, particularly in value-adding sectors, could be further strengthened. Motor manufacturing was one sector identified for study, the others being minerals beneficiation and agro-processing.

Promoting ties with Japanese companies

While in Japan as part of a delegation led by President Jacob Zuma, Davies took part in a meeting of the Tokyo International Conference on African Development (Ticad 5) as well as in several bilateral meetings and business engagements.

He said developing the automotive component sector was a key sector in the Department of Trade and Industry's industrial policy action plan. Japanese motor firms Toyota and Nissan have a strong presence in the local market.

The joint study identified various ways in which SA and Japan could co-operate in promoting the automotive sector and how Japanese expertise could be deployed to assist in this.

For instance, Japan has agreed to deploy "master trainers" to promote leaner manufacturing and productivity maintenance to enhance competitiveness in the sector.

Japan would also investigate ways to use beneficiated mineral products in SA, such as aluminium and steel for its motor manufacturing sector.

It also agreed to deploy an expert to assist in the development of the value-addition of platinum into products such as jewellery, fuel cells and automotive components.

Japanese companies involved in green energy, infrastructure projects and the manufacture of household goods had already expressed interest in establishing themselves in South Africa.

Davies believed Japan's presence would grow as the country expanded into Africa. Japan is SA's third-largest trading partner and 110 Japanese companies have investments totalling R192bn here. These businesses together employ about 150,000 people.

Most of SA's trade with Japan is dominated by mineral exports and SA is pushing for it to import more intermediate goods.

Source: Business Day via I-Net Bridge