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NAACAM is recognised as the voice of the South African automotive component industry both domestically and internationally. As a member driven organisation we are at the forefront of industry leadership, representation and stakeholder engagement for automotive component manufacturers.Anchoring our membership base are suppliers to OEMs for assembly in SA as well as to OE export markets and the domestic and global aftermarket. These manufacturers are supported by a band of associate members who provide specialised services across a diverse range including financial services, logistics, IT, incentive consulting and a host of others.The majority of component suppliers to OEMs are globally owned however there is a significant emphasis of increasing the number of home grown participants in this space. To that extent, NAACAM devotes much resources towards positively impacting the localisation, transformation and supplier development environment in SA.
NAACAM is recognised as the voice of the South African automotive component industry both domestically and internationally. As a member driven organisation we are at the forefront of industry leadership, representation and stakeholder engagement for automotive component manufacturers.Anchoring our membership base are suppliers to OEMs for assembly in SA as well as to OE export markets and the domestic and global aftermarket. These manufacturers are supported by a band of associate members who provide specialised services across a diverse range including financial services, logistics, IT, incentive consulting and a host of others.The majority of component suppliers to OEMs are globally owned however there is a significant emphasis of increasing the number of home grown participants in this space. To that extent, NAACAM devotes much resources towards positively impacting the localisation, transformation and supplier development environment in SA.
The association represents more than 150 manufacturing brands, across approximately 210 regional production sites.
About 80% of NAACAM manufacturing members supply to the OEMs (for car assembly operations as well as for the OEM aftermarket needs) and to the independent aftermarket. The balance are Tier 2 and Tier 3 suppliers.
More than 70% of South African main Tier 1 manufacturers are NAACAM members.
Automotive Parts and Accessories Manufacturers Overview Total manufacturing sales for automotive parts and accessories reached around R113-billion in 2022, compared to R106-billion in 2021 and R69-billion in 2020. (Statistics SA).
The split of turnover for 2022 (NAACAM Quarterly Survey) was:
Total component manufacturing employment is estimated to be 83 362, up from 78 874 in 2021 (Automotive Export Manual 2023).
For the 2022 period, the component industry’s capital investment is estimated to be around R4.8-billion.
Reviewing South African Tier 1 Sales and Local Content Profile for 2022
2022 started positively with the sector showing signs further recovery compared to the previous years. Total Tier 1 sales to the local OEMs reached R17.2-billion in 2022 Q1, well ahead of the 2021 Q3 and 2021 Q4 levels of R10.1-billion and R11.3-billion respectively.
However, sales in 2022 Q2 dropped to R13.6-billion. This was largely due to the KwaZulu-Natal floods of April 2022 that severely affected Toyota South Africa Motors, resulting in its plant being shut for several months. This had a direct impact on the sales of local suppliers during this quarter.
Encouragingly, sales for 2022 Q3 increased impressively to R18.4-billion, and then further to R20.7-billion in 2022 Q4, with the total sales for 2022 reaching R69.8-billion. Total sales for 2023 Q1 reached R18.1-billion, with this ahead of the comparative year-on-year level for 2022 Q1 by R1.6-billion. This suggests that total Tier 1 sales growth is projected in 2023.
An analysis of the Tier 1’s absolute local content levels, which comprises Manufacturing Value Added (MVA), plus deemed local purchases from local suppliers, increased from R5.4-billion (2021 Q3) and R6.1-billion (2021 Q4), to R11.6-billion (2022 Q4) and R9.9-billion (2023 Q1). This has been driven by growth in MVA as well as increased local purchases by Tier 1s. Despite the growth in absolute levels of local content, actual local content, as a percent[1]age of sales, displayed no real growth, averaging 52.6% in 2022. This is due to MVC and local purchases growth being offset by increased import levels.
Unpacking the South African Tier 1 Sales B-BBEE Profile for 2022
When considering transformation, and the B-BBEE sales profile of the local Tier 1 firms supplying the local OEMs, Level 8 comprises the largest portion of their OEM sales, accounting for 25.6% of the total, followed by Level 6 (19.2%) and Level 2 (19.1%). Overall, Level 1-4 makes up 41.5% of total sales, with Level 5-6 accounting for 21.4%. Level 7-8 and non-compliant firms make up the remaining 37.1% of the sales total.
Increased focus by Tier 1 firms on improving their transformation profile is required to ensure that maximum benefits are derived from the APDP going forward.
For more information on BMAIS, please contact: Graham Barrett, BMA Intelligent Systems [email protected]
Tel: +27 (0) 31 764 6100
