South African partnership for competitiveness

Automotive Industries, Spring, 2008 by Malcolm Babbin

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South Africa's automotive industry is one of the oldest in the world--the first car (a Benz Velo) was imported in 1896, and assembly of the Model T Ford began in a former Port Elizabeth wool packing shed in 1924,

It remains the biggest auto industry in Africa. South Africans are both resourceful and good at forming partnerships. Helping to develop partnerships between business, local, provincial and national Government, labor, universities and colleges is the Automotive Industry Development Centre (AIDC).

Automotive Industries (AI) asked Barlow Manilal, AIDC Acting Chief Executive Officer, what South African component manufacturers had to offer the world market.

Manilal: South Africa is home to seven assemblers. This has provided a global platform to our manufacturing base. The government's incentive and support programs have also started showing dividends in productivity improvements and international best practice. We consider ourselves as a niche manufacturing base for lower volumes relative to USA and Europe. With South Africa ranked at 44th in the World Economic Forum's global competitiveness index, we are a viable alternative to India and China. South Africa's ICT and banking infrastructure is amongst the world's best.

AI: What is the AIDC doing to help optimize logistics channels?

Manilal: The AIDC has identified Logistics and the Supply Chain as one of its three key focus areas. We undertake a number of inventions that fall within the following service areas: (i) Infrastructure (ii) Process Improvements and (iii) Collaboration. Within the service area of infrastructure, we have been instrumental in developing automotive supplier parks throughout the country. Within the service area of process improvements, the AIDC has led the development of a number of world first interventions that have enabled the industry to interact and integrate seamlessly. South Africa has ranked 24th in the World Bank's New Logistics Performance Index (LPI), making it the leading African country in trade logistics.

AI: What are the main strengths of the South African motor industry?

Manilal: The industry has built an enviable reputation as niche manufacturer of lower volumes runs that are unsustainable in most other countries. This is augmented by the Department of Trade and Industry's Motor Industry Development Program (MIDP), which can largely be credited for phenomenal growth rate. Most of the assemblers resident in the country have been successfully operating for around 70 to 80 years. The past 10 years has seen unprecedented growth in the local market. Total sales last year were more than double the figure for 1999--only eight years previously. The industry and key Government agencies are targeting production volumes of around 1.2 million vehicles by 2020. This is almost a doubling of the current outputs.

The local vehicle industry has also demonstrated the ability to design components specific for African conditions. The global growth surge over the next 20 years is undoubtedly going to come from Africa. This country will be the platform from which to spearhead any brand penetration into new African markets.

AI: What services does the AIDC offer?

Manilal: The AIDC should be seen as a key stakeholder in the South African automotive industry and an entity that will continue to provide high value support. This is validated by the numerous local and international awards the organization has received in recognition of leadership, high quality delivery, innovation and customer satisfaction.

The AIDC is an industry support centre established by government to assist the automotive industry in its quest for global competitiveness. Establishing automotive supplier parks has become a specialist service, whilst our productivity improvement initiatives yield incredible benefits in a sustainable manner.

Another focus is training. Over the past seven years in excess of 50 000 students have benefited from our skills development initiatives and this number continues to grow.