SA automotive sector

By Calvin Augustine

South Africa has cemented its position as a global player in the auto manufacturing sector with its own home-grown automotive components supplier opening its doors. Last year Batyi Automotive Component Supply (BACS) opened its new facility in Pretoria.

BACS manufactures vehicle components for the Ford Motor Company. The company emerged from an incubation centre that supports black suppliers to be independent and globally competitive. The new facility employs 60 people and there are plans to bring in young trainees to further develop their skill sets.

The new facility is a testament to government’s work through our Automotive Production and Development Programme to promote the country as an automotive manufacturing hub. The programme has uplifted our automotive manufacturing and successfully attracted top automotive producers from around the world. 

The automotive sector is one of the country’s largest economic sectors contributing 4,3 percent to the country’s gross domestic product. The industry is also the country’s fifth largest export sector accounting 18, 1 percent of total exports and employs over 110 000 people.

Over the past few years, a number of global automotive manufactures have expanded their operations in the country. It includes the BMW Group which recently announced that it will exclusively manufacture the next-generation BMW X3 at its Rosslyn plant in Pretoria from the second half of 2024. The company will invest R4.2 billion over five years to prepare its manufacturing facility for BMW’s first locally-produced electric vehicle.

Our country has also attracted the production of first generation of hybrid electric vehicles such as the Toyota’s Corolla Cross. South Africa is only one of seven locations for the production of this hybrid car. The vehicle will be exported to 40 countries across Africa, which is set to be boosted by the facilitation of intra-African free trade under the African Continental Free Trade Area. 

The production of these two electric vehicles positions our country as major destination for electric and hybrid electric vehicles and is another important step to transform the car-making business into a green industry. 

Other automotive investments include the largest-ever investments in the local automotive industry by Ford Motor Company in 2021 to boost its production capability. The company is investing R15.8 billion in its local manufacturing operations. 

In another vote of confidence for local car manufacturing, Nissan had invested R3 billion to build its new Navara bakkie at its plant in Rosslyn, Pretoria. Nissan’s investment would allow the company to increase production to more than double the current production volume of 40 000 units in one shift.

Furthermore, Toyota invested R6.1-billion to expand the production of its Hilux and Fortuner models at its plant in Durban. We also saw the Volkswagen Group earmark R4.5 billion for new models and infrastructure at its Uitenhage factory and Beijing Automobile International Corporation invest R11 billion in a vehicle manufacturing plant in the country.

In strengthening the country’s position as the manufacturing hub, government established the Tshwane Automotive Special Economic Zone (SEZ). The zone is an outcome of the SA Investment Conference held in 2018 where the automotive industry pledged to invest and fulfil the commitments in the Automotive Master Development Plan 2035.

Launched in 2019, the Tshwane Automotive SEZ has attracted more than R4 billion in investment. Once completed, the Automotive Zone will create more than 2 000 permanent jobs while more than 8 000 jobs created during construction. 

The investments in the automotive sector demonstrate the confidence global companies have in the country. It also broadens economic participation through small, micro and medium enterprises and co-operatives, and will promote skills and technology transfer.

We should never lose sight of the positive attributes that make our country an investment destination of choice. It includes our stable democracy, sound financial system and highly regulated banking sector. Investors are supported by world-class infrastructure, exciting innovation, research and development capabilities and an established manufacturing base.

Let us rally behind our nation’s automotive industry and its value chain to ensure its growth and to position it as the premier automotive manufacturing sector in the continent and the world.