Naamsa welcomes SONA commitment

The National Association of Automobile Manufacturers of South Africa (Naamsa) has welcomed President Cyril Ramaphosa’s plan to boost the manufacturing sector, including the automotive industry.

Michael M MABASA Naamsa

Ramaphosa said in his State of the Nation Address that the focus this year will be on getting the automotive industry back to full production, implementing the Black Industrialist Fund and working on a new platform for expanded auto trade with the rest of the continent.

The President also highlighted the recent investments in South Africa by original equipment manufacturers (OEMs), including the R16 billion investment by the Ford Motor Company to expand their manufacturing facility in Tshwane for the next generation of Ford Ranger and Volkswagen Amarok bakkies, which will support the growth of about 12 small and medium-sized automotive component manufacturing enterprises.

The President also mentioned the investment by Toyota in its KwaZulu-Natal facility to start the production of the first generation of hybrid electric vehicles to come off a South African assembly line - and that these follow investment announcements by Nissan, Mercedes Benz and Isuzu to expand production facilities to cement South Africa’s position as a global player in auto manufacturing.

Naamsa CEO Mikel Mabasa said the association welcomes Ramaphosa’s emphasis on the government’s collaboration with the South African automotive industry during the COVID-19-affected 2020.

He added that Ramaphosa’s reference to the ongoing announcements of significant investments in the country’s automotive industry underscores the confidence in the country by the automotive industry and all its multinational corporate partners.

He said the R6.0 billion Automotive Industry Transformation Fund (AITF) industry-wide initiative, earmarked to transform the industry by broadening and deepening the participation of black and historically disadvantaged entrepreneurs in an effort to grow and develop the South African automotive industry, is now fully operational.

“Currently, along with the seven OEMs, 32 multinational Tier 1 component suppliers are in the process of joining the AITF, while truck and bus companies, as well as independent vehicle importers, will be applying to join the fund soon,” he said.

Mabasa said Naamsa is encouraged by the South African government’s commitment to economic stabilisation and the drive for deepening investment in the country. He said all the automotive key performance indicators for 2020 were undoubtedly under pressure owing to the most turbulent year in the history of the motor industry globally and in South Africa.

“Our sector was shaken to its very roots as new-vehicle sales in 2020 declined by 29.2% and vehicle exports by 29.9%. Considering that the automotive sector contributes 6.4% to the country’s economy and accounts for 27.6% of manufacturing output and for 15.5% of total South African exports, the impact of COVID-19 on the industry contributed to a further devastating blow to the country’s already recessionary climate,” he said.

However, Mabasa said the South African automotive industry remains the most dynamic manufacturing sector in the South African economy and is a significant driver of economic growth and development in the country.

Mabasa said the automotive industry's performance over the past three decades has been dependent on the constructive collaboration and partnership with government and hence the attraction of major investments into this sector has been stimulated by the long-term certainty and consistency provided by government’s policy regime to support the sustainability and growth of this sector in the country.

He said the SA Automotive Masterplan 2035, which is due for implementation from July 2021, will create a framework to secure even higher investment and production levels and will continue to provide multinational vehicle and component companies with the consistency they need to invest confidently in South Africa.

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