NAACAM Announces New Initiatives at 40th Annual AGM

NAACAM recently hosted its 40th annual general meeting, in partnership with BMW SA at the OEM’s Learning Academy in Rosslyn.  President of NAACAM and KAP Automotive CEO, Ugo Frigerio, said that NAACAM has evolved as an organisation, in the last year. In addition to the industrial policy advocacy and traditional association services offered to members, NAACAM embarked on a number of new initiatives to support the automotive component sector.

In terms of youth skills development, NAACAM has partnered with the International Youth Foundation (IYF) to roll-out a large-scale programme to support the upgrading of curricula delivered at TVET colleges. “This is to ensure that TVETs remain responsive to the needs of the automotive sector. IYF’s core expertise lies in their TVET Curriculum Diagnostic and Enhancement Model,” he said. International donor funding will be leveraged to support this programme, with an opportunity for alignment with existing automotive industry skills development programmes.

He said that in 2020, merSETA will be constituting a chamber to exclusively support automotive component manufacturers, in-line with the dedicated chambers for OEMs and tyre manufacturers. The intended outcome is the provide dedicated research, and a number of accredited qualifications to ensure alignment with the requirements of component manufacturers.

Additionally, NAACAM will be supporting its members to access international experts to deliver production improvement and technology upgrading support to drive company-level competitiveness. Regarding the future of skills, NAACAM will look to investigate learning platforms to support adoption of Industry 4.0 methodologies in the automotive sector.

Mr Frigerio confirmed that NAACAM is deeply committed to promoting meaningful transformation in the sector and will actively endeavour to increase the number of Black-owned component manufacturers in the sector. He said that platforms such as the NAACAM Black Supplier Day and the NAACAM Show are key opportunities to showcase the capabilities of Black-owned manufacturing businesses. He urged NAACAM members to take ownership of their transformation agendas and encouraged them to support the development of emerging supplier.

Global Trade Environment

Brexit was a significant issue in 2019, which could affect the components sub-sector, both positively and negatively, but there is still no clarity of the outcome, he said. A no deal Brexit was set to affect 6.6 billion in SA’s vehicle exports to the UK through a 10% tariff. The dti and NAACAM are continuing to engage on potential effects of EU sourcing requirements that might be linked to raw materials from the UK which pass through SA’s production process.

“Concluding the African Continental Free Trade Agreement (AfCFTA) was a highlight of 2019. It came into force on the 30th May 2019, with actual trade beginning 1st June 2020. NAACAM will continue engaging authorities to see how this aligns with the proposed Africa Automotive Industrial Pact. Ghana and Kenya are collectively a R2 billion market, with prospects for further growth under improved market access conditions in the AfCFTA,” he said.

NAACAM Deeper Localisation Initiative

He said that the focus of the localisation initiative is the conception and development of an innovative solution to promote the identification of Tier 1 localisation opportunities. He encouraged NAACAM’s Tier 1 members to actively identify new deeper localisation opportunities and engage emerging suppliers to assess the feasibility of localising components. “There are a number of ‘low hanging fruit’ in the deeper localisation space, we must work harder to exploit them,” he said.

Sector analysis  

Mr Frigerio said that growth in the global light vehicle contracted by 1,4% in 2018, with China, Japan, and Germany being the largest producers of passenger vehicles in 2018. South Africa’s global production rank remained at 22nd in 2018, with a market share of 0,64% and improved to 582 000 units in 2018. He said that exports continue to remain an important driver in terms of volume for the local industry.