Although there was an altogether sober mood at the CAR Conference ’08, Toyota SA and NAAMSA president Johan van Zyl urged the motor industry to “keep its eye on the ball on what we want to achieve in the long term in South Africa”.
Introducing himself as a “card-carrying, and founding member of the APDP (Automotive Production Development Plan”, Dr Van Zyl reflected on the history of the Motor Industry Development Plan (which is currently in place and will last until 2012) and defended the plan for ensuring the survival of the automotive sector in South Africa.
And although the MIDP and its successor, the APDP, had not steered clear of controversy, Van Zyl argued that the level of industry protection in South Africa was not excessive, and some measures were required to build industry to a competitive level.
However, “it’s impossible to keep industry going by virtue of protectionist policies… the objective of the automotive segment should, and must, be to become globally competitive.
“The APDP second phase starts in 2013… And that will coincide with an industry-wide move away from CKD assembly to real manufacturing – the focus of the APDP will change from offering export incentives to production incentives,” he said.
Van Zyl argued that manufacturers needed the ideal environment to attract investment in production facilities and added that he wasn’t “satisfied with investment allowance currently afforded to component industry.
“What is SA’s real competitive advantage? The say our labour costs are high, but we have to build our industry on high levels of productivity, not low labour costs. A real advantage could be gained from acquiring raw materials (ie. steel) at the value of what it costs to produce locally and not at a dollar-linked world market price.
“(For local manufacturers), it is impossible to be competitive without being a part of a global supply chain… Given the various locations of production sites, there may be opportunities to improve cost competitiveness by cutting down on logistics cost.
“In terms of FBU production, South Africa will see more B and Sub-B segment vehicles being produced and fewer C-segment cars, a rationalisation of platforms, and needless to say, increased production is critical to a business growth,” he added.
Looking ahead, Africa would become a more important export market for South African-built vehicles, Van Zyl said. He concluded: “We must create a culture of manufacturing… making things means making people, therefore give them real skills, craftsmanship and South African won’t become a society of hamburger flippers”.
- For an overview of the CAR Conference ’08 Speakers and Presentations, Click here
- To view more Conference-related News, Click here.
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