Latest news with #AutomotiveProductionDevelopmentProgrammePhase2
TimesLIVE
2 days ago
- Automotive
- TimesLIVE
Government vows to stimulate growth of auto component sector
Tau outlined various efforts under way to support the industry, such as reforms to the Automotive Production Development Programme Phase 2 (APDP2) regulations. 'Some of these reforms include incentive structure, shifting duty credits to reward manufacturing, instead of assembly credits. 'Our critical minerals and metals strategy will prioritise benficiating platinum group metals, copper and manganese for high-value new energy vehicle components like fuel cells and batteries,' he said. Stronger incentives to produce NEV models locally are also set to take effect. 'The Taxation Laws Amendment Act, gazetted on December 24 2024, introduces a 150% capital allowance, for qualifying investments in EV and hydrogen vehicle production. It covers assets such as buildings, plants and equipment brought into use between March 1 2026 and March 2036.' On the EV manufacturing skills development front, Tau confirmed that new curricula and certification programmes are being developed with the Tshwane University of Technology, the Cape Peninsula University of Technology and Unisa, which will culminate in a pilot project involving 100 students next year. 'We have walked a long journey with the automotive sector on transformation, inclusion drives growth, the SAAM 2035's target of 130 new black-owned manufacturers, is advancing.' Tau said the government was working to eliminate compliance burdens and reduce red tape which inhibits investments into the sector. 'Our policy response is accelerating our plan to introduce a general laws amendment bill which looks to fast-track high-impact investments and projects within 90 days.' He said a study through the International Trade Administration Commission (ITAC) would explore the effect of imports into South Africa and the impact on local production. 'We want to grow the sector — so our first option must not be to wield the stick, but rather offer the carrot to companies, to attract more investment into the country, increasing the value-add of our component manufacturers.'
TimesLIVE
3 days ago
- Automotive
- TimesLIVE
SA must boost its auto component manufacturing sector
While the automotive manufacturing component sector faces challenges, there remain opportunities for growth. This is the view of Renai Moothilal, CEO of the National Association of Automotive Component and Allied Manufacturers (Naacam). Moothilal was speaking at a briefing ahead of the Naacam 2025 Show on a panel with Thabo Shenxane, CEO of the Automotive Industry Development Centre Eastern Cape and Jabulani Selumane, CEO of the Automotive Industry Transformation Fund (AITF). A decline in sales of locally assembled new vehicles, increased import penetration in vehicle and component industries, reduced production volumes from domestic carmakers, raw material supply constraints pertaining to steel and new tariff regimes were noted by Moothilal as threats to the welfare of the industry. The Naacam CEO took the opportunity to remind media the sector represents a wide breadth of componentry, including producers of tyres, interior trims, vehicle bodies, auto glass, filters, forging, pressing, powertrain components, plastics, wheels, lighting, tooling, thermal, emissions management systems and more. 'There are opportunities to expand localisation, particularly in the high-value new energy vehicle component space, beneficiating SA and the regional endowment in mineral resources, tapping into growing opportunities under the African Continental Free Trade Area agreement,' said Moothilal. He announced the solutions and other insights would be unpacked in more detail at the show which takes place in Gqeberha this week. This is the fourth iteration of the event and is the first time it has been held in the Eastern Cape. In addition to panel discussions and presentations, the event will showcase exhibitions from more than 150 local and multinational manufacturers and providers of specialised services to the automotive sector. Sector diversification, decarbonisation, renewable energy requirements, digitisation and economic transformation are among key themes for the 2025 agenda. According to Moothilal, the component sector supports more than 80,000 direct jobs, with a broader multiplication effect responsible for sustaining about 500,000 jobs in the economy. It was reported auto components worth more than R63.4bn were exported from SA in 2024, contributing 5.25% to GDP and accounting for 22.6% of total manufacturing output. Taking guidance from the South African Automotive Master Plan 2035 and Automotive Production Development Programme Phase 2, Naacam aims to raise local content to 60%, double sector employment to 224,000 by 2035 and ensure at least 25% of the supplier base at tier 2 and tier 3 level is made up by black-owned businesses. He noted the sector was on the back foot in achieving the goals. 'Local content, though aimed at 60% by 2035, has been stagnant over the period of the master plan which effectively kicked off in 2021.' 'Component manufacturing outside vehicle assembly is where the greatest levels of value addition in the auto sector occurs. It anchors SA's industrial base by providing skilled jobs, new business entrant opportunities, stimulating innovation and enabling mineral beneficiation.' Shenxane noted the significance of the Naacam show being held in the Eastern Cape. 'We host as much as 45% of SA's component suppliers. They are our biggest job creators and are important to the economic life of the province,' he said. Shenxane echoed Moothilal's sentiments about looming challenges, compounded by the country's political nuances, infrastructure issues and uncertainties around unpredictable trade agreements. Selumane took the opportunity to champion the role of small, medium and micro enterprises (SMMEs) in the sector, believing the Naacam show platform could help catalyse transformation. Selumane said since the AITF started operations in 2021, it has funded more than 70 business in the automotive sector, creating and retaining more than 2,700 jobs. 'SMMEs are not junior partners in the journey. They are growth engines, bringing agility, innovation, the capacity to localise components, create jobs and build resilience, but SMMEs cannot thrive in isolation. They require support, access to market, finance, skills and technology,' he said. In a Q&A session, the imminent closure of Goodyear's Kariega tyre manufacturing facility and the prospect of Chinese local investment and manufacturing were raised with the panel. Moothilal said the circumstances facing the tyre manufacturer showed the extent to which cheaper imports have eaten into domestic brands' share of the market. 'I do think there are policy and infrastructure improvements that can arrest the situation we are faced with. One of the challenges we have to deal with is a stagnant localisation level and rapidly declining domestic market for domestically-produced products.' On the matter of foreign investment from Chinese manufacturers, Shenxane said the enforcement of localisation, creation of jobs and development of skills would be crucial with any foreign investor eyeing the local space. 'We need to find a way to agree on a future industrial policy path as a country, and it must be done fast,' said Shenxane.
