THE National Association of Automobile Manufacturers of South Africa (NAAMSA) has welcomed the government’s decision this week to extend the Automotive Developmental Policy Regime from 2021 through to 2035.
Association President Andrew Kirby said this would enable vehicle manufacturers (OEMs) and their suppliers to plan strategically for the future and to finalise investment decisions with confidence and certainty.
NAAMSA had noted the 2035 objectives which it described as aspirational but also quite ambitious.
At the commencement of the extended programme, the levels of support for vehicle manufacturers in particular would reduce significantly and the only way for OEMs to recoup the benefits was through progressive and substantial increases in localisation – whilst remaining internationally competitive.
The impact of the extended programme on OEMs would vary from company to company given the different business models and the balance of production between export and domestic markets. Overall, the new programme would be challenging for the industry, he said.
Vehicle manufacturers and their suppliers would have to work together to reduce the cost gap against world class bench marks and collaborate closely to achieve sustained net cost reductions to enable the industry to become more competitive internationally, to grow the Industry’s export business and provide affordable products to the local market. In this context, the role and contribution by the trade unions will also prove of vital importance.
Given the rapidly changing environment, internationally and domestically, in terms of technology and social – economic – political change – it was imperative that the industry’s performance should be monitored and evaluated on an ongoing basis and, where necessary, refinements and adaptations introduced to ensure that the future wellbeing of the industry was not compromised.
NAAMSA and its affiliated automotive companies would do everything possible to rise to the challenges of the post-2020 programme which included increased localisation, industrialisation and transformation throughout the automotive value chain, Kirby said.