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Challenges and pressures created by the slump in new vehicle sales and the new US import tariffs have triggered 12 company closures and over 4 000 job losses in two years, says Minister of Trade, Industry and Competition Parks Tau.
However, Tau suggested that the automotive industry should increase the local content in domestically produced vehicles to negate these “urgent challenges”.
“The erosion of industrial value of the sector is exemplified by recent (production) suspensions at Mercedes-Benz and other Original Equipment Manufacturers (OEMs),” he told a National Association of Automotive Component and Allied Manufacturers (Naacam) Show conference in Gqeberha on Wednesday.
Tau said localisation is not merely policy compliance but a strategic imperative.
“A 5 percent increase in local content would unlock R30 billion in new procurement, dwarfing the R4,4 billion US export market, “ he said.
“To achieve this, we must act collectively to address some of the bottlenecks to growth.”
Tau added that the Department of Trade, Industry and Competition (dtic) is reviewing the Automotive Production Development Programme (APDP) as a comprehensive way of responding to the challenges the sector is facing, while also ensuring regular growth in the sector to meet the goals of the Automotive Masterplan.
Some of these reforms include the incentive structure and shifting duty credits to reward manufacturing instead of assembly credits, he said.
Tau said the critical minerals and metals strategy will also prioritise beneficiating platinum group metals, copper, and manganese for high-value new energy vehicle (NEV) components, such as fuel cells and batteries. — Moneyweb
Online Reporter