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Sunday Read: A look at SA's auto manufacturing industry

Jul 14 2019 09:35
Carin Smith

Approximately one-third of value addition within South Africa's domestic manufacturing sector is derived either directly or indirectly from vehicle assembly and automotive component manufacturing activity, according to Michael Mabasa, CEO of the National Association of Automobile Manufacturers of South Africa .

This positions the industry and its broader value chain as a key player within SA's industrialisation landscape.

Naamsa represents, promotes and protects the automobile industry's collective and non-competitive interests. It has more than 41 members, many of whom are vehicle manufacturers, importers and distributors, and truck and bus assemblers across South Africa.

"We play a transformative role in contributing to the sustainable development of the country's productive economy, add value to the automotive industry stakeholders and create prosperity for the people of South Africa," says Mabasa.

The industry contributes 6.9% to SA's gross domestic product (GDP) - 4.4% is derived from manufacturing and 2.5% from retail.

Vehicles and automotive components are exported to more than 155 international markets.

The manufacturing segment of the automotive industry presently employs around 110 000 people across its various tiers of activity - from component manufacturing to vehicle assembly.

This, combined with the industry's strong multiplier effect, leads to it being responsible for around 457 000 jobs across the South African economy's formal sector.

"Several South African vehicle assembly plants and their domestic component manufacturers have received international accolades for the quality of their outputs, clearly demonstrating the capabilities of the industry," says Mabasa.

The industry exported a record 351 139 vehicles in 2018, worth more than R114bn, along with R51bn in automotive components.

In 2018, the export of automotive products reached a record amount of R178.8bn, equating to 14.3% of SA’s total exports.

According to Mabasa, diversification into new emerging markets is a continuing trend and underlines the automotive industry's competitiveness drive and the continuous widening of the country's traditional trading base.

In 2018, light vehicle (passenger cars and light commercial vehicles) exports accounted for 60.1% of total domestic light vehicle production.

Of the 351 139 units exported in 2018, passenger car exports comprised 63.1%; light commercial vehicles comprised 36.6%; and medium and heavy commercial vehicles and buses comprised 0.3% of the total.

Mercedes-Benz, with its C-Class model, continued to be the pace-setter in terms of exported vehicles in 2018. The EU, on the whole, dominates as a region with exports of 233 772 vehicles destined there in 2018. Germany has remained the domestic automotive industry's top export destination over the past three decades.  

In Mabasa's view, Africa's medium- to long-term potential remains positive as the continent has a low level of motorisation, as well as a growing middle class - ingredients which predict a growing demand for new vehicles.

Passenger car models manufactured in South Africa in 2018 included the BMW 3-Series 4-door and X3; the Ford Everest; Mercedes-Benz C-Class 4-door; Toyota Corolla 4-door new and previous series and Fortuner; and the Volkswagen Polo new and previous series.

Light commercial vehicle models manufactured in South Africa in 2018 included the Ford Ranger; Isuzu Motors KB and D-Max; Nissan NP200, NP300 Hardbody; and Toyota Hilux and Quantum.


naamsa  |  sa economy  |  auto industry  |  manufacturing
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