JOHANNESBURG – The National Association of Automotive Components and Allied Manufacturers (NAACAM) says the government must force international car manufacturers to increase the local content of South African-made vehicles to 60%.
The South African Automotive Master Plan (SAAM) 2035 is currently under review as it is highly unlikely that the country will achieve its 60% local manufacturing content and 224,000 job creation targets.
Renai Moothilal, chief executive officer of NAACAM, said in an interview with MISATV that the company believes localization is the most powerful lever for domestic economic growth, job creation and local skills development, as parts manufacturing provides the deepest employment in the automotive value chain.
In an interview with MISATV conducted by MISA spokesperson Fakamir Hlubi-Majora, NAACAM CEO Mutilal pointed to Brazil, Thailand and Turkey as examples where governments have set binding conditions for original equipment manufacturers (OEMs).
In these markets, meeting state-mandated localization requirements is not optional, but a condition of being able to sell your vehicle there.
“We shouldn't feel apologetic about it…Localization is what makes sure we get significant added value from the OEM,” Moothilal said.
“The global standard for localization is 60%.
“In South Africa, it's only 40%, but we should be getting more.
“OEM companies in South Africa receive significant support from the state and the working class.
“We feel like we should be militant.
“60% is the target in the master plan.”
Moutilal said this goal existed only on paper and lacked the political will to ensure it was achieved.
MISA, the retail auto industry's majority union representing 79,000 members, supports NAACAM's position.
Creating sustainable decent jobs is at the heart of the Master Plan.
“OEM companies that produce locally receive significant incentives from the government, so it is not unreasonable to ask them to commit to creating real manufacturing jobs,” said Martlé Keyter, Chief Executive Officer of Operations at MISA.
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