A reduction in tariffs can also have negative consequences for South Africa. The reduction of tariffs has opened our market up dramatically to the rest of the world. In the steel industry there has been a lot of talk of moving some of the production out of this country. We have seen numerous low cost Chinese vehicles and other products enter this market which are priced extremely aggressively. Our tariff reduction plans have been possibly too rapid and aggressive and this could have led to a substantial inflow of imported brands and products, whose quality has often been questionable and which have not been suitably supported in South Africa by their principles.
But times are changing. Chinese vehicle quality has improved significantly recently. Whilst they may still not be at the level of Korean, Japanese and German standards they are having a considerable impact on the local industry.
Another negative aspect has been with a reduction of protection and
the traditional basis on which we build vehicles in South Africa. This is also due to some extent a consequence of changes introduced with the Motor Industry Development Plan (MIDP). A major impact is that we do not have the same historical level of local content as we used to have. Local content has been reduced from around 66% historically down to between 28% and 30% now.
We have seen significant job losses as a consequence of opening up our markets. I do not think it was truly responsible to reduce the tariffs on Completely Built Up Units (CBU) imports into South Africa as dramatically as was the case. I think we relaxed duties too quickly and that it had a serious impact on some of the local production. But I guess there has been some positive trade-off in that there has been a lot of export complementation.
We are part of the global village now and that forces us to take certain actions to be relevant in that space. It is no longer a situation where our standards are good enough. South African standards have to compete in the global market place and I think we do that very admirably in the automotive industry. We have some of the best standards in the world. The BMW plant in South Africa has been recognised as amongst the best in the world. Kaizen and Process Control “Kaizen or ‘continuous improvement’ was not part of the organisational culture when I joined Nissan. But Toyota had practiced Kaizen for a long time. I am sure it was just part of the Japanese way of life in all their businesses all over the world. The principles were brought to us via the Japanese after I had been at Nissan for a couple of years. It is a marvellous process! It is a fundamental business process. It is not only specific to manufacturing, but it should be applied to all and any business. We embraced it very willingly
16 Management Today | April 2012
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