Speaking at the Nedbank Manufacturing Roundtable, Head of Policy and Regulatory Affairs at NAACAM, Beth Dealtry, highlight the critical importance of increasing current levels of localisation in the automotive sector to support sector growth targets established under the SA Automotive Masterplan and ultimately strengthen the sector’s contribution to the country’s economy. Joining Beth on the Roundtable were Amith Singh, Disa Mpande, Eustace Mashimbye, Ajay Bachulal and Njombo Lekula.
Although noting that SA has world class component manufacturing capabilities, Beth reflected that the sector has not been able to increase localisation over the past decade, with average vehicle local content remaining stagnant at 39.5% in 2023. To unlock localisation opportunities it is critical that efforts to increase local vehicle production are made to enable economies of scale.
Along with this, key infrastructure reforms, development of local accredited testing facilities, local availability of autos-grade raw materials and skills development will boost the competitiveness of local manufacturing and strengthen the business case for localisation. On the policy front, Beth recognised that APDP 2 programme offers significant support for the sector and maintenance of this is essential for investor confidence. However, there is a need to assess what tweaks to the programme could enable it to more successfully drive localisation.
Beyond reflecting on the positive impact of localisation from an economic growth perspective, Beth also highlighted how localisation assisted manufacturers during Covid. At a time when global supply chains and logistics faltered, imported products were substituted with local product to derisk and stabilise supply chains.
Overall, bolstering localisation requires a strong and concerted effort from all stakeholders. Sincerest thanks to Nedbank and Amith Singh for creating a platform that not only highlighted the importance localisation but also got the conversation started on what more needs to be done to see more products being proudly produced in South Africa. Read more