Spreading their footprint into Africa is key to sustaining South Africa’s automotive manufacturers – but all industry players and stakeholders will need to support this shift into the continent.
This is according to National Association of Automobile Manufacturers of SA (Naamsa) chair Andrew Kirby, speaking in the wake of the organisation’s Automotive Conference held on August 31.
Kirby said on Tuesday that all the SA vehicle manufacturing companies understood the need to expand their interests into the African market.
“Essentially, almost all the SA manufacturers are pursuing some form of support for lowlevel manufacturing in other countries in Africa,” he said.
“So there’s going to be a lot of activity into Africa.
“Using the base of what we have in SA makes sense, to leverage that as the support for African manufacturing – as opposed to getting that support from outside the continent.”
He said Nigeria and Kenya, and the countries close to them, were the most viable candidates due to their size.
Volkswagen South Africa (VWSA) announced plans earlier this month to build an assembly plant in Ghana, with facilities already established in Rwanda and the company looking into expanding to Nigeria and Ethiopia.
Kirby, however, emphasised the need for the government to become involved.
“We have a very well-structured set of regulations around South Africa, but what we would like [our] government to do is to help to negotiate an auto-pact with countries where it is viable to sell new vehicles, and even have a level of local manufacturing.
“They would need to create an industrial policy framework that can support that, but then you’d need some restriction on the importation of used cars, otherwise the investment is not viable.
“In many cases, SA doesn’t have an advantage over countries outside the continent.
“We need to find a way in which we can create those automotive industry bilateral agreements with other countries in Africa.
“If we approach this in a more holistic way, we can really support each other. Right now there’s a lack of that.”
Kirby said the industry was undergoing its biggest disruption since the introduction of the Motor Industry Development Programme in 1995.
This was due to rapid technological growth and changing consumer behaviour.
“As an industry we need to adapt to that very quickly.
“Even though the market is fairly flat at the moment, we need to use this opportunity to prepare ourselves and put the right foundations in place.
“We also have to address the move to the electrification of vehicles in the long term – but I don’t think it will have a mainstream effect in South Africa for the next five to seven years.
“While the market is not buoyant, we need to start preparing the infrastructure, so when the market does start to grow we have the infrastructure available.”