SOUTH AFRICA’S AUTOMOTIVE SECTOR- 2005€¦ · to invest in export programme) for the next...
Transcript of SOUTH AFRICA’S AUTOMOTIVE SECTOR- 2005€¦ · to invest in export programme) for the next...
SOUTH AFRICA’S
AUTOMOTIVE
SECTOR- 2005
CONTENT
• SA Automotive Industry Overview• Incentive programmes• Exports• Investments• Conclusion• Contact Details
SOUTH AFRICA AND AFRICA
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)
SA AUTOMOTIVE INDUSTRY OVERVIEW
• Current contribution to GDP is 6, 6%
• Leading manufacturing sector in economy
• 84% of Africa’s vehicle production
• Ranked 19th in the world
• 0,7% Global market share for vehicle production
• All major OEMs in SA: BMW, DC, Fiat, Ford, General Motors, Nissan, Toyota, VW
• Industry concentrated in Gauteng, Eastern Cape andKwa-Zulu Natal
MOTOR INDUSTRY DEVELOPMENT PROGRAMME
(MIDP)
§ Implemented in Sept 1995 until end 2012
§ To develop an internationally more competitive and
growing industry
§ In essence, encourage industry to specialize in high
volume products, obtain economy of scale benefits,
export competitively and import low volume products
OBJECTIVES ACHIEVED
§ Surge in exports: 28,2% average annual growth rate
since 1995
§ Significant investments in best practice assets and
state-of-the-art technology accompanies by
technology transfers, skills upgrading and training
§ Acceptance of global challenges by all industry
stakeholders
TARIFF STRUCTURE
115
50
30 27 25 20
253040 34
0
20
40
60
80
100
120
140
1995
2002
2005
2007
2012
CBUCKD
Source: TISA
• Japan was SA’s second largest automotive trading partner in 2004 (R18,6 billion or 19% of SA’s automotive trade)
Main products exported to Japan in 2004 (R6,3 billion):• Passenger cars • Catalytic converters• Road wheels/parts• Silencers/exhausts• Filters• Stitched leather seat parts
SA AUTOMOTIVE EXPORTS TO JAPAN
Main products imported from Japan in 2004 (R12,3 billion)
• Original equipment components• Passenger cars• Tyres• Automotive tooling• Engine parts• Engines• Filters
SA AUTOMOTIVE IMPORTS FROM JAPAN
• The main destinations for SA component exports are the major first-world markets 2004 (2003)
Germany 35,9% (34,5%)
UK 9,0% (7,9%)
Spain 8,3% (6,8%)
France 7,9% (8,8%)
USA 7,2% (8,4%)
Japan 2,3% (2,6%)
• Total EU 71,3% (69,9%)
• NAFTA 8,4% (8,9%)
• SADC 5,8% (5,5%)
SA AUTOMOTIVE EXPORTS
PROFITABILITY 1999-2004
Profit performance of light vehicle assemblers
5.8734.257
4.103
3.717
1.285
0.0790
1
2
3
4
5
6
7
Rbil
Source: TISA survey
99 02 0301 04
• Recent investments/announcements by the OEMs include the R2 billion by BMW SA, the R3,5 billion by Toyota SA and R1 billion by Ford (first USA OEM to invest in export programme) for the next generation models.
• Capital expenditure by the 8 OEMs for 2004 amounted to R2,2 billion and is projected to be R5,9 billion in 2005.
• Productive Asset Allowance applications amounted to R13 billion of which R11,2 billion approved to date
• Popular incentive packages used by automotive sector are: – the Small Medium Enterprise Development
Programme (SMEDP)– Skills Support Programme (SSP)– Foreign Investment Grant (FIG)
INVESTMENTS
Interiors: (Airbags, Center Consoles, Instrument Panels)
Engine parts/ components: ( Air-con compressors, manifolds, bottle and air-ducts and metal substrates)
Vehicles: (Expansions etc.)
Electronics: (Connectors and Terminals and on board computers)
Drive Train components: (Springs and Chassis components.)
Body parts: ( Bumpers, Glass and lights)
Aluminium components: ( Forged & die cast)
INVESTMENT PROMOTIONTargeted Areas (by product)
the dti’s INVESTMENT SERVICES
• Pre-Investment services
- Information on investing in SA and business environment
- Detailed sector information
- Providing finance to explore investment opportunities in SA
• Investment services
- Dedicated team of experts
- Deal with investor’s needs on a customised basis through a delivery sheet
• reduce the lead time• provide prompt and accurate advice
– Draw on network of specialists – Intervene on behalf of investor with other stakeholders such as other
Government Departments, Provinces and service providers– Facilitating direct government support in the form of investment incentives
• After care – ongoing contact
INCENTIVES OBJECTIVES
• To raise fixed investment in industries
• Restructure domestic industry towards international competitiveness
• Promote sustainability of recipient projects
• Create wealth, generate employment
• Reduce investment costs for small and medium investors
INCENTIVE SCHEMES
Export oriented manufacturingIDZ
Economic infrastructure projectsCIP
Target marketInfrastructure Promotion
Local and foreign investorsSIP
Foreign investors in manufacturing.
FIG
Manufacturing, Tourism, ICT, Agro-processing and Aquaculture.
SMEDP
Target Group/SectorsInvestmentpromotion
INCENTIVE SCHEMES (continued)
Training programme for recipients of SMEDP & SIP
Skills Support Programme
Manufacturing exportersExport Marketing & Investments Assistance Scheme
Partnerships of 5 or more enterprises can participate in this programme (65:35)
Sector Partnership Fund
All targeted sectors qualifies under this programme (50:50)
Competitiveness Fund
Target Group & Sectors
Competitiveness promotion incentives
OBJECTIVES
•Assistance to companies to increase their competitiveness by supporting patent registration, quality marks and product marks.
•Assistance to increase competency and skill levels of exporters by subsidising exporter readiness assessment, training and development.
•Providing marketing assistance to develop new export markets and growing export markets.
•Assistance to companies under mission support to facilitate match-making, equity, joint ventures and technical transfers.
•Assistance for the identification of new export markets through market research (PMR).
Export Marketing and Investment Assistance (EMIA)
CONCLUSION
§ Positive about future of SA automotive industry
§ SA established as value adding global player
§ Current challenges facing the industry – resilient and
innovative enough to deal with challenges and rise
to the occasion
§ Success is built upon success and prospects hold
well for the future
Contact Details
WEB ADDRESS:www.thedti.gov.za
Call Center Number:0861 843 384