The R4.8 billion investment pledge announced by the National Association of Automotive Component and Allied Manufacturers (NAACAM) reflected the “strong vote of confidence in the South African economy”, Trade, Industry, and Competition Minister Ebrahim Patel said at the NAACAM Show 2023 on 31 August 2023.
NAACAM CEO Renai Moothilal on Friday confirmed that the pledge was consolidated from a group of 16 exhibitors at the event and reflected committed investments to be implemented between now and the end of 2024.
This group, coming from different regions and segments of component manufacturing, was a mix of large multinational and domestic component manufacturers as well as emerging black industrialists.
Patel in a statement welcomed the investment pledges, saying it would support more than 10 000 jobs.
Patel said he was particularly pleased to be part of this major announcement last week because investment was the lifeblood of every economy.
The companies that pledged include Shatterprufe, Atlantis Foundries, South African Tyre Manufacturers Conference, CRH Africa Automotive, John Moffat Prolock, IBO Group, and Auto Industrial Group.
Patel added that the government needed to respond to the private sector’s appetite to invest in the South African economy by creating a conducive environment where companies were more confident in putting money into building more factories. This, in turn, would create job opportunities for young people in a growing economy that represented industrial development.
“I was also pleased to learn that two of the companies that made pledges are Black Industrialist-owned firms that have been brought in as a result of the Automotive Industry Master Plan and the Automotive Industry Transformation Fund (AITF),” Patel said.
The AITF was established as a collective Equity Equivalent Investment Programme (EEIP) as defined in the Broad-Based Black Economic Empowerment Codes between seven multinational automotive manufacturers in South Africa. It aimed to facilitate transformation across the sector’s value chain through the provision of access to developmental funding, access to the market, and access to capacity development for qualifying black-owned entities.
The objectives of AITF include supporting qualifying black-owned entities, driving job creation, as well as enabling meaningful transformation and growth of the automotive sector across the value chain.
The two-day NAACAM Show 2023 last week was attended by more than1 300 visitors and attracted more than 130 exhibitors, across established manufacturers and service providers in the automotive components sector and emerging small, medium and micro enterprises. The next iteration of the Naacam Show is scheduled for 2025.
The auto sector in South Africa contributed 4.9% to gross domestic product in 2023. Component-related investment alone in 2023 was R4.5bn.
According to the International Trade Association’s South Africa-Country Commercial Guide for the Automotive sector overview published in May, South Africa’s global vehicle production ranking is 21st with a 0.62% global vehicle production market share.
Under the South African Automotive Masterplan (SAAM) 2021-2035, the objective is to produce 1% of global vehicle production, or 1.4 million vehicles, per annum in South Africa by 2035. Source: IOL (Business Report)