South African Business 2021

OVERVIEW
in SA), increasing local content and doubling employment and blackowned
businesses in the sector.
South Africa has three centres of automotive production: the
Eastern Cape, Gauteng and KwaZulu-Natal. In the Eastern Cape, the
OEMs are Volkswagen, Mercedes-Benz, Isuzu and Beijing Automobile
Investment Corporation (BAIC). Ford has an engine plant in Port
Elizabeth.
In KwaZulu-Natal Toyota has a large plant just south of Durban.
Although the manufacturers of loaders, dump trucks and haulers are
not counted in the tally of South African OEMs, Bell Equipment, a
global leader in its field, runs a large manufacturing site in Richards
Bay. Dezzi Equipment is based in Port Shepstone. In 2018 AIH
Logistics started assembling Mahindra and Bolero bakkies from kits
imported from India on a site at the Dube TradePort. Pretoria is home
to BMW, Nissan and Ford.
All three centres are making use of targeted land allocation to
try to boost the sector through industrial parks or Special Economic
Zones. The idea is to get economies of scale through grouping
companies which serve one another. Training becomes easier and
costs can be reduced.
Chinese OEM BAIC is the first new entrant into the market to set
up within an SEZ. The planned investment in the Coega SEZ by BAIC
and its partners is R11-billion. BAIC expects to be building 50 000
vehicles per year at its site at the Coega SEZ by 2022.
Automotive component suppliers and downstream
manufacturers such as electronics components, metal fabrication,
plastic moulding, precision machining and trim are expected to
take up opportunities in the Automotive Zone within the Coega
SEZ, as they do at the East London Industrial Development Zone
(ELIDZ). Companies in the ELIDZ which manufacture in support of
the Mercedes-Benz operation include Feltex Automotive Trim, TI
Automotive (brake and fuel pipes), Yanfeng Automotive Interiors,
Linde+Wiemann (seat frames, recliners, metal surface treatment)
and Onelogix VDS, which is a logistics company that delivers
motor vehicles.
In line with the policy of developing industrial economic
hubs, the Durban Automotive Supplier Park is being built at Illovo,
south of Durban and near to the Toyota plant. The Dube TradePort
Corporation will manage the project, which covers 1 013ha. The
Durban Automotive Cluster, which has 39 member companies,
ONLINE RESOURCES
Automotive Industry Development Centre: www.aidc.co.za
Manufacturers: www.naacam.co.za
National Association of Automotive Component and Allied
National Association of Automobile Manufacturers of South Africa:
www.naamsa.co.za
is funded by the municipality.
Together, these firms have
about 17 000 employees.
Trade and Investment
KwaZulu-Natal (TIKZN) estimates
that the province’s component
automotive manufacturers
enjoy a combined turnover
approaching R10-billion.
The Tshwane Automotive
Special Economic Zone (TASEZ)
is a project of the Gauteng
Province, the Department of
Trade, Industry and Competition
(dtic) and the City of Tshwane.
The implementing agent
is the Coega Development
Corporation (CDC), the
developer and operator of the
Coega SEZ.
The TASEZ, branded as
“Africa’s First Automotive City”,
has a mandate to promote
economic participation for
SMMEs and create employment
in the region. Sectors
targeted include security,
ICT maintenance, facility
maintenance, construction,
automotive supply chain,
marketing and advertising,
catering and events.
Both the Nissan and
BMW plants are expanding
and Ford is investing in
Silverton. An Incubation
Centre for SMMEs has been
launched at Nissan’s assembly
plant in Rosslyn. The facility
supports small enterprises
through subsidised rental
and mentorship and training.
Management of the centre
is done by the Automotive
Industry Development Centre,
a subsidiary of the Gauteng
Growth and Development
Agency (GGDA). ■
79 SOUTH AFRICAN BUSINESS 2021