Absa Vehicle and Asset Finance is interrogating the best ways to support South Africa’s automotive industry and vehicle dealers to continue doing business under the trying and challenging circumstances created by the COVID-19 pandemic.
Faisal Mkhize, the managing executive of Absa Vehicle and Asset Finance, says the bank believes it can overcome some of these challenges through strong strategic partnership, such as the partnership it has with automotive business council naamsa.
Mkhize told a recent naamsa dinner he hosted for a large number of South African dealers in Mauritius for a week for a conference, and the discussions included how it could ensure that the bank:
He says Absa’s board had shown “some serious commitment” to the automotive industry and has requested the vehicle and asset finance business to craft practical strategies and identify new financing mechanisms that the bank should introduce in the sector to ensure the bank did not get left behind.
“We participate and support innovators who are bringing alternative energy sources into homes and who help to ensure that we are able to connect to vehicles in a way that is sustainable.
“We are committed to that plan, so much so that we have formed partnerships with a number of successful businessmen in South Africa to build that type of a plan,” he says.
Mkhize says Absa has formed a partnership with businessman Patrice Motsepe to enable people who are serious about creating alternative sources of energy to be able to participate in this.
This is a reference to the establishment by Absa of a renewable energy platform to finance about R6.5 billion in gross assets, in partnership with Motsepe’s African Rainbow Energy and Power.
The initial investment supports selected renewable energy technologies, including solar, wind, concentrated solar power, biomass and other solutions.
Absa’s renewable energy and environmental sustainability solutions also extend to households because it believes the key to electric mobility starts with renewable housing and living solutions as 90% of electrical vehicle charging happens at home.
“We can engage, we can learn through these processes and, by doing so, we can then build the future that we require,” Mkhize says.
Mkhize reckons one of the most inspiring things he had learned in the past three years and by being part of the automotive industry is that the industry “is full of innovators and go-getters” who make a difference.
“In spite of some of the noise that we have heard and anticipated at the beginning of COVID-19, there was no noise about whether we were going to see a lot of job losses in the [automotive] market.
“Strategically, the power of the sector leadership has made sure that we keep jobs alive.
“We had to come up with different plans and, also as a bank, we had to come up with different funding mechanisms to ensure that there is no dealer in South Africa that we have a relationship with that is going to be out of business as a result of COVID-19 because the said dealer was not necessarily part of constructing it but found himself in those situations,” he says.
Mkhize says South Africa contributes quite a bit to the global auto sector but warned: “If we can't innovate and move forward in a progressive way, the risk is there that we will be left behind.”
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