The Portfolio Committee on Trade, Industry and Competition is urging a robust strategy to deepen localisation, enhance job creation, and implement meaningful transformation within South Africa’s automotive sector, reports Cape {town} Etc.
This call to action follows an assessment of the progress regarding the South African Automotive Industry Master Plan 2035.
During a recent meeting with the Department of Trade, Industry and Competition (DTIC), key automotive industry stakeholders and relevant entities, the committee evaluated how well the Master Plan has performed in strengthening the automotive value chain and bolstering the local economy.
The Automotive Industry Master Plan 2035 aims to expand the sector by increasing local content, enhancing global competitiveness, and transforming ownership and participation throughout the supply chain.
A flagship objective of the plan is to double employment in the automotive sector by the year 2035.
While the DTIC and industry representatives reported a recovery in vehicle production, employment, and exports to pre-COVID-19 levels, there were concerns that overall performance still significantly lags behind the targets outlined in the Master Plan.
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Alarmingly, local content levels remain stagnant at approximately 40%, hindering the industry’s potential to create additional jobs and foster domestic suppliers.
In light of these challenges, the DTIC has announced a comprehensive review of automotive policies to implement more effective interventions.
This review aims to tackle obstacles like competition from cheaper vehicle imports, persistent global economic uncertainty, and the industry’s ongoing transition from internal combustion engines to electric vehicles.
The policy revision is also focused on accelerating localisation and transformation initiatives in the sector.
Industry stakeholders voiced their urgent need for a restructured tax and incentive system that promotes domestic vehicle production and sales.
They noted that the existing framework favours independent importers and semi-knocked down (SKD) kit assemblers, allowing them to introduce vehicles into the South African market at significantly lower costs.
This threatens local employment and stifles demand for domestically manufactured vehicles, they said.
Additionally, stakeholders urged the government to make better use of local public procurement policies, particularly in the realm of public fleet management.
They advocate for the inclusion of black entrepreneurs and local service providers in public fleet systems as a means to expand the local value chain, create jobs, and advance transformation within the industry.
Chairperson of the committee, Mzwandile Masina, underscored the automotive industry’s critical role in the South African economy.
He stated, ‘The automotive industry plays a critical role in our economy and presents real opportunities for transformation and the growth of township economies. Local public procurement must be leveraged to support domestic vehicle production, improve economies of scale, and expand the range of components produced locally,’
Masina highlighted that many challenges highlighted by industry stakeholders intersect with the responsibilities of the DTIC, National Treasury, and the Department of Transport.
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Picture: Parliament SA
Source: Parliament SA
