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Automotive sector key to growth: Zuma

29 September 2011

The government is committed to boosting the country's manufacturing sector and in particular the automotive sector in its drive to create more jobs for South Africans, says President Jacob Zuma.

Speaking during an automotive industry job creation meeting in Port Elizabeth on Wednesday, Zuma said the automotive sector was a key growth sector in the economy, and the government would play its part by providing whatever incentives it could to boost the industry.

"Amongst other support measures, the IDC [Industrial Development Corporation] has announced a massive increase in the level of industrial funding. It will make R102-billion available over the next five years," he said.

Zuma also called on the industry to play its part by increasing localisation and contributing to skills development and training, in partnership with local academic and training institutions.

Taking advantage of strong industries

The government's approach was to take advantage of industries that had a strong competitive edge in the world, as was the case with the automotive sector, Zuma said.

"We have exceptional production facilities, good communication facilities and readily available raw materials among many advantages, which we have over the years been utilising very optimally. We also have good access to markets in Africa and the southern hemisphere."

It was because of all these factors that in recent years South Africa had become one of the best performing motor vehicle markets in the world.

South Africa's vehicle exports were high enough to allow it to export to more than 70 countries - evidence of the country's achievements in this sector, Zuma noted.

Automotive Production and Development Programme

The Motor Industry Development Programme, implemented by the government in 1995, had paid dividends, he said. Through the programme, vehicle production increased from 388 442 units in 1995 to 534 490 units in 2007. Exports rose from 4% in 1995 to 32% in 2007.

The programme will be replaced by the Automotive Production and Development Programme from January 2013.

"The intention with the new programme ... is to expand the automotive vehicle production to 1.2-million vehicles per annum by 2020. The programme includes the Automotive Investment Scheme, which we expect should raise the number of jobs created," he said.

The new programme was developed in consultation with National Association of Automotive Manufacturers, the National Association of Automotive Component and Allied Manufacturers, the National Union of Metalworkers of SA and other industry interest groups.

Source: BuaNews