The Eastern Cape provincial government says it is working on getting more black business into the automotive sector.
Provincial department of economic development, environment and tourism spokesperson Ncedo Lisani said over the next five years its supplier, the Automotive Industry Development Centre (AIDC), would work with the industry to unpack localisation and transformation opportunities for new black entrants into the sector.
From the South African and provincial perspective, the current automotive sector production volumes do not meet the threshold so that there can be introduction of more tier 1 suppliers in the sector
“It has to be noted that the automotive original equipment manufacturers (OEMs) appoint tier 1 suppliers that have an international footprint.
“From the South African and provincial perspective, the current automotive sector production volumes do not meet the threshold so that there can be introduction of more tier 1 suppliers in the sector.
“However, the sector is seeking to localise more components to local tier 2 and tier 3 suppliers,” Lisani said.
The government has been criticised by Nelson Mandela Bay businessman Weza Moss, questioning what role it was playing to help black business in the sector.
Moss said it was a crucial aspect, if black business owners in the sector were to become tier 1 suppliers by working with giant companies such as Volkswagen SA and Isuzu SA.
In 2019, South Africa’s seven vehicle original equipment manufacturers launched a R6bn Automotive Industry Transformation Fund (AITF), designed to support black participation in the industry.
Just last week, US motor giant Ford Motor Company announced a R15.8bn investment in its South African subsidiary which is expected to create more than 11,000 new jobs.
Ford International Markets Group (IMG) operations director Andrea Cavallaro said R10.3bn of the R15.8bn would be spent on upgrading Ford Southern Africa’s Silverton vehicle assembly plant in Tshwane into a state-of-the-art facility on par with anything else in the Ford world.
The plant, which builds the Ford Ranger bakkie and variants, mainly for export, would see annual capacity production increase from 168,000 to 200,000.
A new Ranger model is due to be launched in 2022.
The remaining R5.5bn would help prepare components suppliers for the new model, including the provision of equipment and technology.
Cavallaro said the investment would create 1,200 new jobs at the Silverton plant and at least 10,000 jobs at suppliers.
Lisani said through partnership with tier 1 suppliers, the EC Auto Industry Forum and the AIDC had developed a localisation supermarket with 60 components earmarked for localisation.
Thus far one black-owned company has been supported in Nelson Mandela Bay
“Thus far one black-owned company has been supported in Nelson Mandela Bay. Further support has been delayed by Covid-19 but this work will be accelerated as restriction are eased.
“Also, the government has in the year 2020 focused on fighting the Covid-19 pandemic and so through its jobs fund programme the provincial government supported 36 companies, of which six are in the automotive and engineering industry.
“The six companies were able to save 222 jobs with the funding support of R4.3m.
“These are in the two metropolitan municipalities [Nelson Mandela Bay and Buffalo City],” Lisani said.
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