SA-Turkey Joint Automotive Component Trade Initiative

While the South African automotive component manufacturing industry was negatively affected in 2020, it caused local manufacturers to harness their areas of competence to manufacture products for alternate markets.

This was the message at the ‘Turkey-South Africa Global Supply Chains’ initiative with the focus on how the COVID-19 crisis has accelerated the trend to develop more resilient global supply chains by increasing the focus more on localisation and searching for new production centres.

Renai Moothilal, Executive Director of the National Association of Automotive Component and Allied Manufacturers (NAACAM), said that a number of members have successfully moved into manufacturing for other markets, producing products such as medical devices.

“The industry’s focus and challenge now is to see how local component manufacturers can play more actively in different parts of the industry, globally.”

He said that the pandemic has also affected the global supply chain as regards inputs for the SA automotive industry. “Local Tier 1 suppliers and OEMs look at global production and logistics costs, and due to uncertain global volumes and increased COVID-19 compliance, it makes sense to try and find efficiencies by moving to local source of services, as well as for sourcing input material,” he said.

“In assembly and for supplying OEMs, the input of subcomponents is dictated by global source requirements. The opportunity for Turkey and South Africa is to find technical partnerships that can serve as alternate supplier technologies that fit the specifications that meet existing global source requirements.”

“The current disruption in the supply chain makes a case for partnerships with T1 Turkish companies and to some extent, T2 companies.”

Mr Moothilal said that Turkish companies offer a high level of technical competence. This further justifies the move for companies from both countries to work together.

“Complementing this is the need to unlock capabilities across the continent to strengthen consumer demand,” he said.

The session held on Tuesday, 16 February 2021 was organised by DEİK Turkey- South Africa Business Council in collaboration with the Embassy of the Republic of Turkey in Pretoria. “The initiative will continue to assess how the new normal will shape the future of value chains and potential cooperation areas that could be evaluated between Turkish and South African stakeholders to attract new opportunities for Turkish and South African businesses in post-COVID period,” Mr Moothilal concluded.  END