Investing in South Africa's Automotive, Components, Yellow Metals and Heavy Vehicles Industry - Driving manufacturing growth - InvestSA
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
South
Africa
Factsheet
2020
Investing in South Africa’s
Automotive, Components, Yellow Metals
and Heavy Vehicles Industry
Driving manufacturing growth
Export destinations (% of vehicles), 2018
Automotive, Components, Yellow Metals 2%
and Heavy Vehicles Industry in SA 6%
4%
Europe
> South Africa is home to Africa’s most advanced automotive industry. 7% Asia
Seven major original equipment manufacturers (OEMs) with Africa
operations in South Africa produce over 50% of all vehicles produced 67% Australasia
14%
in Africa.
North America
> The broader automotive industry contributes approximately 7% to Latin America
the country’s GDP (4.4% manufacturing and 2.5% retail). Vehicle and
component production accounts for about 14% of South Africa’s
manufacturing output.
Passenger cars and commercial vehicles
> In 2018, more than 550 000 vehicles were registered in South Africa, production and sales, 2018-25f
more than anywhere else on the continent.
2018 2019f 2020f 2021f 2022f 2023f 2024f 2025f
> With about 370 000 passenger vehicles sold per year, South Africa Production
Passenger
0.32 0.33 0.34 0.35 0.33 0.31 0.32 0.33
(million units)
cars
accounts for more than 40% of Africa’s passenger vehicle market.
Sales
0.37 0.37 0.38 0.37 0.35 0.34 0.34 0.35
> In 2018, automotive-related exports accounted for US$12.9bn, (million units)
equating to approximately 14% of total South African merchandise Production
Comercial
0.29 0.3 0.3 0.31 0.29 0.28 0.29 0.29
vehicles
(million units)
exports. Europe and in particular Germany are key destinations for
Sales
South African new vehicle exports. (million units)
0.19 0.19 0.2 0.19 0.19 0.18 0.18 0.18
> In 2018, South Africa produced approximately R33bn worth of
agricultural, mining and construction machinery.
of vehicle of South
> According to the Construction and Mining Equipment Suppliers’ 50% production 7% Africa’s
Association (CONMESA), more than 5 600 new units of yellow metal
in Africa GDP
equipment were sold in 2017, an 18% increase from the previous year.
Why Supplier Expansion of
invest? proximity and
local content
production capacity
Over the two years 2017-18,
With about 500 Tier 1, Tier 2 and the major vehicle manufacturers
Tier 3 suppliers, OEMs are able to recorded more than R15bn in
source a wide range of parts capital expenditure. Investments
and components within in capacity expansion will
the South African increase the demand for inputs
Rising demand including parts
for SA-made
market.
500 of components. Over
supplier
mining-related equipment companies R15bn
The 2018 Mining Charter requires invested
mining companies to procure 70% of its
mining equipment from South Africa-
Duty-free
based manufacturers with at least 60%
access to Attractive policy
local content. This is expected to drive
environment
localisation and the demand for local
inputs and for locally-made
1bn The Automotive Production and
consumers Development Programme (APDP) and the
heavy vehicles and yellow
South African Automotive Masterplan (SAAM)
metal equipment. Preferential 2035 provide a clear vision and direction
market access for South Africa’s automotive industry.
70% Thanks to a number of trade
agreements South Africa-based
The well-developed SAAM contributes to
the attractiveness and competitiveness
of OEMs enjoy duty-free access of local industry, offering incentives
procurement
to consumer markets and support to OEMs
spend
in the US, EU and and suppliers.
Policy
Southern Africa.
certaintyWhere to invest?
> Automotive and components manufacturing is concentrated in the Eastern Cape,
Gauteng and KwaZulu-Natal.
> The key automotive and component manufacturing facilities are located in Silverton,
Rosslyn (both in Gauteng), Uitenhage, Port Elizabeth, East London (in Eastern Cape)
and Durban (KwaZulu-Natal).
> The Coega IDZ in Port Elizabeth, the East London IDZ in Eastern Cape, Dube TradeZone
in Durban and the Automotive Supplier Park in Rosslyn north of Pretoria cater to the
needs of OEMs and supplier companies.
Brits Rosslyn (Pretoria)
• Iveco • BMW
Pretoria
• MAN • Nissan (Renault, Fiat)
Aeroton • Ford (Mazda)
• Fiat • Tata
• Scania • UD Trucks
• Mercedes Benz Olifantsfontein
• DAF • Iveco (Pretoria)
Springs • Volvo Benoni • MAN
• BAW • Navistar
• Hyundai
Germiston
(Johannesburg) LIMPOPO
• Marcopolo
MPUMALANGA
NORTH WEST GAUTENG
KWAZULU
FREE STATE -NATAL
Dube City
(Durban)
NORTHERN CAPE • Mahindra
Pinetown (Durban)
• MAN
Isipingo (Durban)
• Toyota
EASTERN CAPE
Umbogintweni
• Volvo
WESTERN CAPE
East London
• Mercedes Daimler
(Mitsubishi, Mitsubishi Fuso)
Uitenhage
• VW Port Elizabeth
• Mzantsi (VW) • Isuzu
• Ford (Engine)
• FAWWhat support exists?
> Given the sector’s strong contribution to employment creation, investment attraction and
overall economic growth, the South African government is committed to creating an enabling
manufacturing environment for both local and international investors in the sector.
Government Support National Incentive Innovation Support Skills Development
Programmes Programmes Innovation support Support
• South African Automotive • Volume Assembly is available through • South African Universities
Masterplan (SAAM) 2035 Allowance (VAA) programmes such as and Technical and Vocational
the Support Programme Education and Training
• Automotive Production • Production Incentive (PI)
for Industrial Innovation (TVET) colleges offer courses
and Development • Automotive Investment (SPII), the Technology in mechanical engineering,
Programme (APDP) Scheme (AIS) and Human Resource electrical engineering, artisan
• The Automotive Supply • Medium and Heavy for Industry Programme training etc.
Chain Competitiveness Commercial Vehicles (THRIP) and the SEDA
Initiative (ASCCI) • Through its Skills
Automotive Investment Technology Programme
Development and Training
• Automotive Industry Scheme (MHCV-AIS) (STP). Other funding
(SD&T) Department the
Development Centre programmes are available
• People-Carrier Automotive Industry
(AIDC). through the Technology
Automotive Investment Development Centre (AIDC)
Innovation Agency (TIA).
Scheme (P-AIS). focuses on bridging potential
skills gaps in the sector.
What are the opportunities?
7 major
In 2017, e d a record
> Opportunities are found in the development of local content and
v e s t
OEMs in
component manufacturing. There is a need to develop existing
a
b n , a lo ng with OEMs that are already in the market and also to attract more
R8.2 n
tial R4b OEM investments to boost local production and replace imports
substan e
ent by th
of finished products
in v e s t m nt
o t iv e c ompone Key opportunities in the automotive
autom s.
supplier value chain include:
• Engines, radiators, filters
• Air conditioning/climate control systems
• Alarms and tracking devices
Sout In 2018
• Axles and transmission shafts
to ch
h Afr
i , • Body parts and panels
oose cans were • Catalytic converters, silencers, exhaust systems and components
car b fro able
rands m 49 pas • Seats and related parts, seatbelts, leather covers
deriv a seng
ative nd 3 716 er • Suspension and shock absorbers, springs and other related parts
with s , provi m o del
the w ding • Steering wheels, columns and boxes
to ma ide t h em
rket- st choice
• Ignitions, starting equipment, gauges and instrument parts
siz
the w e ratio in
• Lighting equipment
orld. • Wiring harnesses, instrument panels, vehicle interiors, electronic
drive components and partsHow to invest?
Opportunity Go Investment Investment
identification ahead preparation execution
Conduct • Decide on geographic • Acquire/lease site,
1 feasibility location most suitable rent office space
study for investment • Apply for municipal
for your • Consult property services (e.g. water,
product or Location specialists, real estate electricity)
identification agents to identify
service
suitable offices for
operations
Evaluate
2 • Conduct site visits
outcome of
of suitable locations
feasibility
study • Consult with HR/ • Conduct interviews,
recruitment hire staff
Take agencies about staff
3 requirements
• Apply for work permits
for expatriate staff
investment
decision Resourcing • Determine immigration • Open a bank account
requirements requirements
• Apply for finance
(HR, capital, • Determine funding
4 Decide on
model (e.g. self-
• Set-up IT
investment finance, IT) infrastructure/systems
funding, debt, equity)
strategy
• Consult with IT systems
in order
providers
to best
align to • Determine corporate • Register company
the market structure • Apply for licenses
opportunity • Determine licensing and and permits
permit requirements • Apply for National
Compliance • Consult with labour Level Incentives
lawyers Schemes, Skills
and legal affairs
• Consult with InvestSA and Other Support
to identify eligibility for Programmes
incentives, skills and
other support initiatives
the
fident in
InvestSA ready to assist
re c o n s
“We a
u r w o r kforce a
o
ities of r relatio
ns,
capabil la b o u
sound principle
s
we have b a s ic
on the greeme
nt
founded la b o u r a
-house our
of our in m m it m ent from
co the
and the t t e s t ed to by
ees a
employ n dance r
ate.”
t e ,
99% a t
u t h A f rica Ltd
So
es-Benz
Merced 2019Key contacts for more information
InvestSA
+27 861 843 384
Investsa@thedti.gov.za
http://www.investsa.gov.za/
the dti
contactus@thedti.gov.za
http://www.thedti.gov.za/
Rashmee Ragaven
Director: Advanced Manufacturing
Invest South Africa
Department of Trade and Industry
+27 (0)12 394 5929
RRagaven@thedti.gov.za
Melvin Mkhize
Deputy Director: Automotives
Invest South Africa
Department of Trade and Industry
+27 (0)12 394 5712
Mmkhize@thedti.gov.za
Information sources
AIEC, various years; BMI, various years; Capital Equipment News, 2018;
Deloitte, 2019; the dti, various years; EIU, various years; MarkLines, 2019;
OICA, various years; Oxford Economics, various years; Statista, 2019; Research partner |You can also read
