Econometrix
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The document analyzes the automotive sector in South Africa by examining key indicators such as exports, imports, and the sector's importance to GDP. It finds that while exports of vehicles and components have increased since 2005, imports remain larger. The regulatory environment for the sector has evolved from using local content requirements to providing export incentives. There are opportunities to modernize production techniques, serve growing regional markets, and leverage South Africa's incentives, resources, and infrastructure to attract more investment in the automotive industry.
Econometrix
- 1. An analysis of the Automotive Sector in South Africa : A Health check on the status of the sector, the Past, Present and Future A presentation by Tony Twine – Econometrix Pty Ltd – 9 March 2011
- 2. Vital Signs for the Health Check: Pulse: Domestic and Export Demand Blood Pressure: Imports Body Mass: Importance to total GDP Reflexes: Reactions to Exchange Rates Skeletal Muscles: The Regulatory and Support Environment Prognosis: Opportunities for the future
- 6. SA Automotive Trade Balance Rm 2005 2006 2007 2008 2009 2010 Exports Vehicles 22000 24600 27500 50100 33200 45500 Components 23277 30501 39100 44100 27800 26500 TOTAL 45277 55100 66600 94200 61000 72000 Source: DTI, NAAMSA, Econometrix
- 9. SA Automotive Trade Balance Rm 2005 2006 2007 2008 2009 2010 Imports Vehicles 25800 32400 38000 31200 24000 32400 Original Equipment Components 30600 35300 40500 48100 30000 37500 Aftermarket Components 16000 20800 23700 29600 25900 31100 TOTAL 72400 88500 102200 108900 79900 101000 Source: DTI, NAAMSA, Econometrix
- 16. Regulatory Environment 1961 – 1989 Mass-based local content programme 1989 – 1995 Value-based local content programme 1995 – 2012 Export complementation based motor industry development programme 2013 - Volume incentive automotive production and development programme APDP already in effect by 2010 Augmented by the Automotive Investment Scheme of 2010 Had impact on investment decisions by VW AG and BMW AG Trade benefits from SA-EU trade agreement
- 17. Opportunities Virtually no mass production techniques presently used in SA Auto industry Catalytic converters (18% global share) are an obvious exception Replace or substantially upgrade batch production facilities Potential for sub-Saharan African markets on the back of commodity demands – Chindia effect SA authorities hungry for mining and manufacturing employment expansion Potential to leapfrog technologies in automotive engineering Relatively low vested interests in existing engineering base Abundant raw materials available domestically Incentive programmes aimed at encouraging fixed capital formation Modern communications infrastructure with strong international links Local economy is essentially English Language based Substantial history and modern practice of English and Roman-Dutch law