T
he South African motor industry is unlike any other. Where else would you find vehicle buyers spending more on their monthly car instalments than on their home loan repayments?
It is a measure of how important a vehicle is in the SA consciousness – and not only because of the prestige and the perceived value involved, but also as a result of the lack of an effective public transport infrastructure, which makes owning a vehicle a necessity, rather than a luxury.
While a market worth about 570 000 sales units in 2011, of which passenger cars accounted for almost
400 000 units, may appear to be significant, the industry’s commercial viability is diluted by a vehicle offering that spans more than 60 different brands and some 2 200 model derivatives. That figure makes South Africa one of the most competitive vehicle markets in the world. Mix in the emotive approach of new car buyers, and you have a unique combination of factors that makes the local automotive business a fraught and complex affair.
To fully understand those complexities, one needs to consider the industry from the different perspectives representing vehicle manufacturers and importers; the motor retail environment; and ultimately the motoring public.
For SA’s vehicle manufacturers, the country’s location at the southernmost tip of the African continent is only one of many challenges. It places them thousands of nautical miles away from source countries as far as components are concerned, but also far away from potential export markets.
Exports are a key aspect of the local motor manufacturing industry. It affords economies of scale which would otherwise be impossible to achieve, thus ensuring a level of viability attractive enough to sustain the seven major companies currently manufacturing vehicles locally. Between them, BMW and Nissan in Rosslyn, Ford in Silverton, Mercedes-Benz in East London, Volkswagen in Uitenhage, General Motors in Port Elizabeth and Toyota in Durban, not only produce many of the volume sellers for local consumption, but account for vehicle exports that approached 300 000 units in 2011.
But building cars in SA for export in order to achieve viable economies of scale is only one facet of a far more complicated scenario. As the second largest employer, after mining, the motor and allied industry plays a vital part in government’s ongoing efforts to address unemployment.
While mechanisation and robotisation would be the most obvious ways to improve efficiencies in the industry’s ongoing quest to remain globally competitive, its commitment to job retention and expansion has meant that the manufacturing industry has had to rely on skills upliftment, infrastructure investment and quality to control to grow its export business.
There is no doubt that the substantial export contracts
awarded to local auto makers has also been partly due to the support of their respective parent companies. But in the harsh light of economic realities, these contracts would not have materialised on the basis of social responsibility alone: the growth in exports is a significant feather in the motor industry’s cap.
Photos: © Volkswagen SA and
www.mediaclubsouthafrica.com April 2012 | Management Today 31
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103