The South African automotive industry supports just under 1m jobs. While the industry is stable thanks to considerable support from government, it is imperative that it stays that way.
The South African automotive industry is eight times the size it was in 1994. That’s some healthy growth spread across 22 years. The National Association of Automobile Manufacturers of South Africa (Naamsa) is projecting that the industry’s contribution to GDP will sit at around 7.5% in 2017 and going forward could reach 8.5% by 2020, if the sector meets its goal of 1m units sold annually. In 2015 it contributed R256.7bn or 7.2% of SA’s GDP.
Currently, BMW, Ford, General Motors, Mercedes-Benz, Nissan, Toyota and Volkswagen all manufacture cars in SA, with Chinese manufacturer BAIC having announced it will begin manufacturing in SA from 2018/19.
This growth has come with considerable support from the department of trade and industry (dti), first with its Motor Industry Development Plan (MIDP) launched in 1995, and then its successor, the Automotive Production and Development Programme (APDP), which was launched in 2013. Capital expenditure by the top seven automotive manufacturers was expected to grow to R7.6bn in 2016, up from R6.6bn in 2015, driven to a large extent by the incentives offered by the APDP.
The APDP expires in 2021, so currently its replacement is under consideration and is expected to be finalised by the end of the year. Naturally, the automotive industry is calling for policy certainty on which to base investment decisions and is highlighting the employment it creates and the revenue it generates.
Too big to fail
This story is from the 6 April 2017 edition of Finweek English.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the 6 April 2017 edition of Finweek English.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
THE HEALTH OF SA'S MEDICAL SCHEMES
As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.
The effect of Gilbertson's departure
With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.
Making money from music
Why investors are increasingly drawn to the music industry.
Conviction is key
Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.
The post-pandemic toolkit
How CFOs can use technology to support growth.
Big city living exodus
Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.
Big compact, big value
Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.
On barriers to entry
There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.
Fear and greed in one index
To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.
Africa's largest data centre facility coming soon
Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.
