2020 Mid Year Reflections: NAACAM President Ugo Frigerio

Dear CEO/MD and fellow NAACAM member

In greeting you in the midst of the greatest health and economic welfare crisis the globe has experienced in many decades, I trust you continue to take the precautions to keep yourselves, your family, your staff and all those around you safe. With that, allow me to reflect on some happenings within a NAACAM context over the first half of the year.

No sooner did the sector conclude a fairly difficult and lengthy wage bargaining process in January, thankfully without industrial action, did we begin dealing with the impact of COVID-19. This has been tough in the SA automotive sector, more so with the local vehicle market currently 31% down YoY, and exports even greater hit, at 39% down. The volume losses experienced by OEMs globally continue to wind their way into our sector and the uncertainty of demand outlook is something we seemingly have to contend within the short term. Cash flow and employee-related concerns are commonplace.

It’s often said that with a crisis comes opportunity and the past few months has allowed the association to connect with, and be of service to its members, in a way not commonly experienced. NAACAM, together with sector stakeholders, was central to ensuring members got back to a level of production in May 2020. A variety of position papers, research and regulatory advice notes flowed from our office to different authorities. This was accompanied by a high level of member information sharing and interaction through established digital media channels as well as our dedicated WhatsApp platforms for CEOs and HR officials, and specialist ad hoc support given to members who experienced unprecedented and uncertain environments.

NAACAM also implemented initiatives to support manufacturers pivot into and market their production of medical devices, to supplement the lower levels of autos production. Several NAACAM members are part of the National Ventilator Project and Shivani Singh, our commercial director, has led the country’s mandated work stream for face shield manufacturing. During the course of all this we have laid the basis for a stronger and more transparent partnership between ourselves and key sector partner, NAAMSA.

It is expected that 2021 will see the implementation of APDP2 under the auspices of SA Automotive Masterplan 2035, and although there are ongoing discussions around when the new terms come into effect (given the challenges brought upon by COVID-19) NAACAM continues to serve the interests of our members as the sector moves into this phase. Several of our leaders have been part of Minister Patel’s Executive Oversight Committee and its six workstreams. Work has been done in the past few months to assist multinationals start a process of using the recently created Automotive Industry Transformation Fund as a means to deal with the ownership element of the scorecard, and we expect that by the end of 2020, there will be a commercially feasible model in place for this. The pressure for adherence to transformation targets remains unabated.

From a value-added services perspective, much is happening. Stronger partnerships are being leveraged between our manufacturing and associate. Cases in point include NAACAM’s inaugural networking and fundraising focussed regional Golf Days; a partner sponsored AGM and Black Supplier Day at BMW’s Learning Academy in Rosslyn and dinner, hosted with Rugby World Cup winning Springbok, Schalk Brits; special standards training initiatives; and tailored transformation offerings.

A few exciting firsts also occurred. NAACAM took over the administration of the Automotive Supply Chain Competitiveness Initiative (ASCCI) in April this year, to refocus and extract stronger outcomes for micro-level component competitiveness enhancing activities. This was the same month that saw the opening of the dedicated Automotive Components Chamber within MerSETA to drive our sector’s long-term skills development needs. A month later NAACAM launched its fully digital newsletter, achieving class leading analytics at first attempt. In June the association delivered an aftermarket-focussed webinar in partnership with the UK autos industry association SMMT.

This within the context of a targeted media, profile building and marketing campaign. Watch for the soon to be rolled out localisation optimisation electronic platform which will allow for the seamless identification and engagement of new sub-tier suppliers, as the sector gets to grips with pushes towards the Masterplan’s localisation objective.

The association remains operationally sound and as seen above, is continuing to expand and enhance its service offering to members and looking to support the sector through the myriad environmental operating conditions we find ourselves faced with.

Gratitude is expressed to members remaining with and interacting more with NAACAM as we continue to shape the landscape for automotive component manufacturers. I welcome new members who have joined the association this year. As an industry body, NAACAM will only be as strong as the sum of its parts.

In recognising the really tough economic conditions being faced, the NAACAM NEC has agreed to absorb a small operating loss this year and keep the subscription rates unchanged for the 2020/21 period. I trust this provides a level of relief to members, knowing how every rand is important during these unprecedented times. Of course, the generation of other sources of income remains something NAACAM focuses on allowing us to deliver a value proposition that matches the needs of an industry association serving the needs of this global sector.

The work done by the team at the NAACAM office is valued. Similarly, the contribution of the newly instated NAACAM NEC and regional executive leaders is acknowledged and greatly appreciated. The work they do is voluntary and NAACAM would not be able to deliver on its mandate without their input. I wish you well through the rest of 2020.

Regards

Ugo Frigerio

President: NAACAM