Car industry still owned by whites

Johannesburg - Deputy President Kgalema Motlanthe said on Thursday that racial transformation in the vehicle industry was slow and ownership still lay with the country's white minority.

Almost 16 years after apartheid and despite ambitious policies, the government struggles to ensure that South Africa's business sector reflects the country's black majority.

"At least one percent of business in the metals and engineering industry is black owned," Motlanthe said, at the opening of Volkswagen South Africa's new parts and automotive distribution centre outside Johannesburg.

"This paints a less than rosy picture ... in this industry."

The vehicle industry, the biggest within the manufacturing sector, has recovered since the start of this year, gradually reversing more than two years of decline during which consumers grappled with high borrowing costs and an economic downturn.

Companies operating in South Africa have to meet black economic empowerment (BEE) targets on ownership, procurement and employment to give the country's black majority an opportunity to do business in Africa's most powerful economy.

Firms that fail to meet BEE requirements cannot do business with the government.

Motlanthe said training programmes were failing to address the country's need for high-level skills, especially in management, citing a study conducted at Wits university's Corporate Strategy and Industrial Development Research Unit.

"It also found no link between training initiatives and translation of these into a change in the structure of employment equity, such that training holds out the prospect of upward job mobility," he said, referring to the study's findings.

The car industry contributes more than a quarter of South Africa's gross domestic product.

- Reuters