Econometrix
17
An analysis of the An analysis of the Automotive Sector in Automotive Sector in South Africa : South Africa : A Health check on the A Health check on the status of the sector, status of the sector, the Past, Present and the Past, Present and Future Future A presentation by Tony Twine – Econometrix Pty Ltd – 9 March A presentation by Tony Twine – Econometrix Pty Ltd – 9 March 2011 2011
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Transcript of Econometrix
An analysis of the Automotive An analysis of the Automotive Sector in South Africa : Sector in South Africa :
A Health check on the status of A Health check on the status of the sector, the Past, Present and the sector, the Past, Present and
FutureFuture
A presentation by Tony Twine – Econometrix Pty Ltd – 9 March 2011A presentation by Tony Twine – Econometrix Pty Ltd – 9 March 2011
Vital Signs for the Health Check:Vital Signs for the Health Check:
Pulse:Pulse: Domestic and Export Demand
Blood Pressure:Blood Pressure: Imports
Body Mass:Body Mass: Importance to total GDP
Reflexes:Reflexes: Reactions to Exchange Rates
Skeletal Muscles:Skeletal Muscles: The Regulatory and Support Environment
Prognosis: Prognosis: Opportunities for the future
SA Automotive Trade SA Automotive Trade Balance RmBalance Rm
2005 2006 2007 2008 2009 2010
Exports
Vehicles 22000 24600 27500 50100 33200 45500
Components 23277 30501 39100 44100 27800 26500
TOTAL 45277 55100 66600 94200 61000 72000
Source: DTI, NAAMSA, Econometrix
SA Automotive Trade SA Automotive Trade Balance RmBalance Rm
2005 2006 2007 2008 2009 2010
Imports
Vehicles 25800 32400 38000 31200 24000 32400
Original Equipment Components 30600 35300 40500 48100 30000 37500
Aftermarket Components 16000 20800 23700 29600 25900 31100
TOTAL 72400 88500 102200 108900 79900 101000
Source: DTI, NAAMSA, Econometrix
Regulatory EnvironmentRegulatory Environment
1961 – 1989 Mass-based local content programme 1989 – 1995 Value-based local content programme 1995 – 2012 Export complementation based motor industry development
programme 2013 - Volume incentive automotive production and development
programme
APDP already in effect by 2010 Augmented by the Automotive Investment Scheme of 2010 Had impact on investment decisions by VW AG and BMW AG
Trade benefits from SA-EU trade agreement
OpportunitiesOpportunities Virtually no mass production techniques presently used in SA Auto industry
Catalytic converters (18% global share) are an obvious exception Replace or substantially upgrade batch production facilities Potential for sub-Saharan African markets on the back of commodity demands –
Chindia effect SA authorities hungry for mining and manufacturing employment expansion Potential to leapfrog technologies in automotive engineering
Relatively low vested interests in existing engineering base Abundant raw materials available domestically Incentive programmes aimed at encouraging fixed capital formation Modern communications infrastructure with strong international links Local economy is essentially English Language based Substantial history and modern practice of English and Roman-Dutch law
