While it is true that South Africa has already improved as a vehicle production base, more needs to be done. Currently, said Powels, "we are still 10% more expensive than Western Europe."
In order for South Africa to remain competitive, especially as it is so far away from the world's largest new-vehicle markets in China and the US, the industry needs, for example, "to take costs out of the supply chain", said Powels, adding that Naamsa is "actively involved [at] board level" with Transnet on lowering logistics costs. Naamsa does not have the same level of contact with Eskom, said Powels. South Africa will not grow industrialisation levels unless Eskom develops a different approach to electricity supply, offering manufacturers "preferential tariffs to shield them from the general tariff increases," he said.
Ford Motor Company of Southern Africa (FMCSA) president and CEO Jeff Nemeth stressed that, while the global standard for stock a vehicle producer has to hold in its plant is four hours, FMCSA is at seven days stock, due to "inefficiencies in the logistics system."
Seven-hundred containers should arrive at FMCSA's Pretoria plant each week, said Nemeth, but congestion on the railway lines and roads makes this a challenging task. "We need a change in the transportation system. It has to be stabilised," Nemeth said. In the end, he noted, logistics costs are FMCSA's biggest headache.
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