The local motor industry is in the throes of recovering from a seven-week strike - the longest in history - and has been a major topic in the news as its manufacturing future is debated, so the encouraging words from Minister Davies are sure to be welcomed by vehicle and component manufacturers alike.
The most important initiative is a programme to raise competitiveness and encourage excellence in production in the component manufacturing industry. An amount of R23 million has been spent on this project already this year, while R63 million has been budgeted to improve the competitiveness in the automotive supply chain in a three-year programme. The Department of Trade and Industry will contribute 50% of the latter amount and other stakeholders the balance.
The Minister said that the promised early review of the Automotive Production and Development Programme (APDP), which was instituted at the beginning of the year, will be completed before the end of the next financial year, with the terms of reference being announced by the end of February.
Minister Davies added that early indications are that the APDP is proving a success and it has already resulted in significant investments in new projects; investments totalling R15 billion have been made since 2009 linked to the implementation of the APDP in 2013.
Although the Minister did not announce any specific plans to encourage labour stability in the motor industry he said that all the stakeholders, including the government, were being encouraged to create the very necessary stability.
The Minister said that he was encouraged by a constructive meeting that had been held with members of the National Association of Automobile Manufacturers of SA (NAAMSA) and the National Union of Metalworkers of SA (NUMSA) and a joint statement will be issued shortly. (The secretary-general of NUMSA, Irvin Jim, was present at the official opening of JIMS but did not address the gathering.)
During his address the Minister stressed the importance of the automotive sector in the context of the overall South African manufacturing environment and said that the DTI and other government departments were always looking at ways to increase industrialisation.
One of these initiatives involves the Department of the Environment and Water Affairs, which is embarking on a programme to build charging stations for electric vehicles to encourage increased use of this eco-friendly power source.
The promotion of the manufacture of electric and hybrid vehicles in SA was seen as important and here the APDP would play a role. In addition, the government was compiling standards for these categories of vehicles and had a research programme underway with the University of Port Elizabeth, as well as a commitment that the government would buy electric vehicles where they were suitable.
"In the medium term, South Africa must become a manufacturing base for energy-efficient, green vehicles as global trends indicate that this is where growth will come in the future," the Minister said.
The current programme to promote the local manufacture of buses and minibuses from semi-knocked down (SKD) kits will continue until 2015, after which production had to switch to assembling completely knocked down (CKD) kits.
The Minister said that progress was being made to develop a multi-modal vehicle-manufacturing plant in the East London Industrial Development Zone with six companies shortlisted to run this operation, which will assemble vehicles for a number of companies as a collective venture. The decision on the operator will be made before the end of the year.
The Trade and Industry Minister said that he did not see the recent announcement that Nissan was to build vehicles in Nigeria as a negative for the SA motor industry, but rather as an excellent opportunity for the local vehicle and component makers to benefit as suppliers of products and technology to the Nigerian operations.
"Developments such as these are very good for growing industrialisation on the African continent, which is to be welcomed and I am to sign a co-operation agreement with my Nigerian counterpart in the near future," he explained.
In conclusion, the Minister said that he was encouraged by recent positive developments in the local motor industry. These included Mercedes-Benz announcing it was to lift the annual output at its plant in East London to more than 100,000 units, while Iveco and Larimar were building an assembly plant in Rosslyn at a cost of R530 million and the Minister added that the visiting CEO of the Ford Motor Company, Alan Mulally, had been positive in the outlook for his company's subsidiary in South Africa, which builds vehicles in Silverton and engines in Port Elizabeth.
"Our local motor industry is now solidly established and well positioned for future growth."
