Closure of any business spells disaster for Nelson Mandela Bay

The Herald

2 days ago

With unemployment in the Eastern Cape nearing 40%, the closure of any business is more than just an economic setback — it is a community crisis.
On Thursday, Goodyear SA announced plans to shut down its plant in Kariega, with 907 jobs at risk.
VW Group Africa MD Martina Biene said every business closure spelt disaster for the manufacturing city.
She spoke at the Women Empowerment Network event hosted by the Nelson Mandela Bay Business Chamber at the Boardwalk on Friday.
'It is sad for everyone when a business has to close, even more so in the Bay,' Biene said.
'We still have an unemployment rate of 40%.
'Every business that closes in the Bay is a disaster.'
In its report on liquidations in SA, Stats SA revealed that the country had seen 109 business liquidations in April 2025 and 482 business closures since the beginning of the year.
Biene said this spoke to the early signs of deindustrialisation in SA.
She said VWGA purchased tyres from Goodyear, but the majority were imported to keep manufacturing costs down.
'We are looking at buying tyres from India.
'VW needs to keep manufacturing costs low.
'We all must look at local is lekker , but lekker sometimes comes at a higher price.'
Asked what conversations were being held at a national level to ensure the manufacturing business in SA remained sustainable, Biene said a review of the SA Automotive Masterplan 2035 had to happen sooner rather than later.
'On the automotive industry side, we will propose some short-term measures to probably take away the burden.
'Some of the assumptions of the automotive plan in SA and how the sector grows in SA, as well as how much the domestic market plan grows, have not been met.'
Out of the seven OEMs operating in SA, Mercedes-Benz SA in East London is the only one now exporting directly to the US
However, Biene said that due to the interconnected supply chain, any disruption threatened the broader industry.
'We have common suppliers; we share suppliers because the suppliers are not viable if they manufacture for one of us.
'As much as we compete in product in the market, specifically manufacturing, we're all in this together and we need each other and eagerly look forward to more coming in, such as Stellantis, to stabilise the local industry.
'What we're seeing in SA now is that the local automotive industry is on the verge of being replaced and becoming an import market.
'From a VW perspective, I know we're perceived as being expensive, and this is not because we make a lot of money in this country.
'Manufacturing costs a lot in SA.
'The domestic market is small.
'Last year, Suzuki in India produced two-million cars while all seven OEMs here in SA manufactured 600,000.
'Previously, we were competing with products from Europe 15 years ago, under European labour costs and European standards, but now we're competing with Indian and Chinese labour costs.
'The competitive landscape has changed, but we remain the same with our labour costs. Looking at Indian labour costs, then I'm not so sure if I'm competitive.
'If something were to go wrong with us, the Bay would be in deep trouble.'
Chamber CEO Denise van Huyssteen said while investors needed to come to SA, the government needed to retain those already here.
The Herald