BMW SA managing director and Naamsa president Ian Robertson’s presentation at the end of the CAR Conference on Wednesday set out the bold future goals for the South African motor industry and its growth targets for 2012.
BMW SA managing director and Naamsa president Ian Robertson’s presentation at the end of the CAR Conference at Auto Africa on Wednesday set out the bold future goals for the South African motor industry and its growth targets for 2012.
Robertson, who was presented with the Automotive Man of the Year award by McCarthy Motor Holdings chairman Brand Pretorius earlier in the day, started his speech by beseeching conference delegates to “invent the future”.
Speaking about the positive influence that the Motor Industry Development Porgramme (MIDP) had had on the automotive sector in South Africa, Robertson said: “The industry is characterised by tension… We have a window of opportunity to become globally competitive, but we also have to protect local investments. Similarly, international companies have invested millions in South African business, yet local interests are vitally important and, there is a need to keep improving productivity, but without impeding employment growth”.
“The motor industry has been transformed over the past six years and now contributes just under seven per cent of South Africa’s GDP,” he added, suggesting delegates should “give themselves a round of applause”. “But, looking forwards to 2012 (when the MIDP is scheduled to end), we face the challenge of having to become relevant in the international market (South Africa contributes only 0,7 per cent of world automotive output) and deliver on tasks that will support the economy”.
Robertson outlined the challenges of the motor industry as stimulating the next step in local content development, which, he said, had recently leveled out… He welcomed manufacturers’ “mature, and not disruptive, relationship with labour, but said that dynamic leadership would be crucial if productivity was to be raised to global benchmarks, so that there would be enough “flexibility and speed of implementation” to meet industry’s challenges.
Regarding the MIDP, which is set to be reviewed and probably scaled down next year, Robertson said that without government support, “the motor industry will be a function of critical mass… that’s the way it has always been. By 2012, I would like to see the industry setting new growth and production records.
“If South Africa is to be considered a notable player in the automotive production industry, it will need to produce a million cars a year. That can be achieved in eight years with compound growth of 10 per cent, and in five years with 15 per cent,” he said.
But for the one million target to be reached, a number of issues needed to be addressed. A resilient economy and stable interest rates would aid local growth and support total vehicle sales, for example.
Robertson added: “The car market can be increased if government institutes a scrapping allowance for older cars (the average age of the South African car park was 14 years, he noted). Similarly, incentives for buying small cars would stimulate affordability and have a positive impact on the environment”.
“The stamping out of illegal imports entering South Africa through our ports will require a combined effort by OEMs, the South African Revenue Service and Transnet,” he said.
Robertson was also positive about the prospects of growth in the local labour force: “If we could reach an agreement with labour to run two and a half shifts for six days a week, the South African motor industry could have capacity for that one million mark”.
The Naamsa president also echoed Nada chairman Ray Nethercott’s statements about the positive influence personal leasing would have on the car market and called for flexibility in the banking and finance sectors of the economy.