By: Colin Windell
The two major automotive clusters in Tshwane are ideally sited to foster South Africa’s transition to electric vehicles and to be a major world player if either were to host a battery manufacturing plant.
Tshwane plays host to three major motor manufacturers – BMW and Nissan in the Rosslyn area and Ford in Silverton – but their ongoing viability as exporters will be determined by their ability to adapt to the changes being legislated across Europe.
Indeed, at a recent round table discussion on automotive development in the Gauteng Northern Corridor, which includes Tshwane, Blake Moseley-Lefatola, head of department for the Gauteng Department of Economic Development (GDED) said it wanted the province to adopt a strategic approach to make the area a New Energy Vehicle Hub (NEV).
“It is vital to unpack the NEV value chain to identify manufacturing opportunities and where to focus our efforts. The Department is already looking into a battery manufacturing plant but it is equally important the training processes for new skills that will be needed in this transition are also put into place.”
The event was hosted by the Tshwane Economic Development Agency (TEDA), in collaboration with the Gauteng Department of Economic Development, its implementation arm, the Gauteng Growth and Development Agency (GGDA) and the Automotive Industry Development Centre (AIDC), a subsidiary of the GGDA.
The roundtable discussion brought together industry bodies and experts, Original Equipment Manufacturers (OEMs), component manufacturers, and government stakeholders to discuss and establish precise requirements that will enable the Gauteng Province to develop a long-term strategy to place the Province and the City of Tshwane at the forefront of advanced vehicle and vehicle component manufacturing.
Some of the key outcomes of the roundtable discussion included:
- The need for a coordinated approach between the public and private sectors to drive regional investment in NEVs.
- The importance of developing and investing in the fledgling electric supply chain in Gauteng.
- The need to address the skills gap in the automotive sector and the transition towards cleaner fuel technologies.
Andile Africa, chief executive officer of the AIDC, sounded a stern warning though. “This whole industry has the potential of going up in flames if we don’t do something about it.”
The ‘something’ he was referring to included establishing township hubs close to the automotive clusters to make it easier for staff to get to work, closing the skills gap in existing institutions, providing graduation opportunities and encouraging young learners to embrace science, technology, engineering and mathematics as subjects.
Mikel Mabasa, chief executive officer of the National Association of Automotive Manufacturers of SA (NAAMSA) pointed out in 2022 the auto industry in South Africa contributed 4,9% to GDP.
“That figure excludes value chains such as the banks etc, which is more than 12%,” he said. “However, South Africa’s production share on the African continent at 54,4% actually declined as other African countries, notably Morocco, accelerated their own automotive manufacturing and assembly programmes.
“South Africa has three auto industry hubs if you take in Toyota in KwaZulu-Natal and Volkswagen, Mercedes-Benz and Isuzu in the Eastern Cape, that latter zone actually responsible for 44,6% of production.
“Gauteng should be positioning itself as the major IT Hub and look to become the new Silicon Valley for the local auto industry and it is possible since South Africa still is an attractive destination for the automotive sector.”
That sentiment is supported by the separate announcement BMW would be investing more than R4-billion in upgrading its Rosslyn plant to be able to produce hybrid versions of the next generation of X3.
“Three motor companies are currently doing environmental impact studies ahead of potentially establishing manufacturing facilities in South Africa and one of these is Stellantis which hosts brands including Opel, Citroën, Peugeot, Jeep and Alfa Romeo,” says Mabasa.
“While both mining and agriculture have their own Government ministries and upwards of 3 000 people throughout the departmental structures, there is a very awkward policy development system for the auto industry that keeps it placed within the Department of Trade and Industry (DTIC) and there is simply not enough capacity to fully support the auto industry.”
As a solution he suggested it would be better to create policy within the AIDC and “recalibrate our own structures and then send that up to DTIC rather than it coming down from them”.
Since the vast majority of vehicles manufactured locally are for export, transporting the product to the ports of Durban and Gqeberha becomes a vital link in the chain and there are plans by Transnet to link the Rustenberg rail line into the Tshwane area to provide a direct, albeit longer, route that does not involve freight having to wait for passenger rail at peak times.
Renai Moothilal, executive director of the National Association of Automotive Component and Allied Manufacturers (NAACAM) said it was vital to increase local content in all tiers of the manufacturing chain and, simultaneously, to increase black economic empowerment.
“This can happen only if the sector itself is elevated in importance and there is specific and focused legislative intervention along with increased access to automotive technology,” he says.
There are a large number of role players in the auto industry and manufacturing sector, enough to make a conference such as this a veritable alphabet soup of acronyms. At times it seems a bit like a shattered mirror with each splinter trying desperately to reflect the whole image but achieving only a portion and then, often, a distorted one.
The future of the industry depends on that mirror being made whole again.