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SA auto parts industry revs up
31 March 2004
South Africa has taken a step closer to becoming a significant player in the global vehicle manufacturing sector, through a multi-billion rand deal landed by Volkswagen SA - hot on the heels of a number of new developments set to boost investment and job creation in SA's burgeoning auto industry.
VWSA's R12-billion, six-year contract to export car engines to Germany pushes engine and engine component exports to second place on the list of component exports from South Africa. The new engines will have 30% local content.
According to Trade and Industry Minister Alec Erwin, the deal shows that South Africa's motor industry is capable of supplying increasingly sophisticated parts to the international market – the key, industry pundits say, to building the country's global competitiveness in the sector.
The deal will see Volkswagen exporting 440 000 units over the six years, and creating 250 jobs when production is at full
capacity, Business Day reports.
Motor manufacturers are reported to have spent R3.57-billion in 2003 on capital expenditure, up by more than R1-billion from the R2.32-billion spent in 2002. Most of the investment has to date been foreign investment, with the parent companies of local car manufacturers expanding local operations despite the rand's volatility.
The Volkswagen deal follows an announcement by the Gauteng government that it is on the verge of securing R800-million in private sector investment for a new Automotive Supplier Park in Pretoria. The park will provide shared infrastructure for small component manufacturers supplying the Gauteng plants for Ford, BMW, Fiat and Nissan. It is expected to create around 400 new jobs.
Volkswagen announced earlier that it planned to manufacturer the new Golf 5 in Uitenhage in the Eastern Cape on completion of a R750-million factory upgrade.
At the same time, Nissan South Africa has secured a
R1-billion contract to export locally built single cab pick-ups to Europe, Singapore, Australia and New Zealand from next year.
Erwin said the future of the South African motor industry relies on diversification. "The new [Volkswagen] contract confirms that South Africa is a cost-effective and competitive location for manufacturing cars and parts", he said at the launch of the contract in Uitenhage in the Eastern Cape.
South Africa is also reported to be seeing successes in exporting non-mechanical vehicle components such as seats and tyres.
SouthAfrica.info reporter
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Supplying increasingly sophisticated parts to the international market ... and creating new jobs (Photo: Gauteng Automotive Cluster) |
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