Exports are the lifeblood of South African vehicle assemblers and component manufacturers.According to Mikel Mabasa, chief executive officer of naamsa, the Automotive Business Council, the value of automotive exports exceeded R400 billion in 2023.Local original equipment manufacturers and component suppliers formed the Automotive Industry Export Council (AIEC) in 1999 to promote automotive industry exports and to serve as a link between the industry and the Department of Trade, Industry and Competition (dtic).The importance of exports is ref lected in naamsa’s sales figures for February 2024.Passenger vehicle sales continued to decline, with a year-on-year decrease of 0.9% to 44 749 units.In contrast, exports grew by 8 526 units or 27.5%, to 39 517, compared to the 30 991 vehicles in February 2023.South Africa’s future as an automotive hub depends on logistics and power, as well as retaining favourable trade partnerships.“We understand the importance of upgrading ports infrastructure, enhancing rail networks, and fostering private sector partnerships for efficient logistics operations,” Mabasa said in response to the structural reforms announced by finance minister Enoch Godongwana in his 2024 budget speech.“These improvements are essential for maintaining the industry's competitiveness globally, and the sector is ready to collaborate with Transnet to make tangible systems improvements in our log istics.”Rolling blackouts during 2023 resulted in the country’s seven original equipment manufacturers losing R200 million every six months, resulting in substantial financial losses and deferred investment funding.Another challenge facing the industry is a lack of skills. Delivering the keynote address at a merSETA Gauteng stakeholder engagement session, Naacam, (National Association of Automotive Component and Allied Manufacturers) project manager Lebalang Molobele said Naacam had identified that skills gaps presented a significant barrier to localisation and sector growth.The establishment of a demand-driven TVET curriculum that created a sustainable pipeline of well-skilled graduates entering the industry was essential to unlock localisation and foster economic growth, increased innovation, higher levels of employment and ultimately, increased social equa lit y.In its comment on the February statistics, naamsa emphasised the need for the government to maintain and strengthen the country’s traditional trading relationships.“The trade arrangements enjoyed by South Africa remain essential for the country’s export-oriented automotive industry as they continue to enhance exports to the EU, the UK, SADC, and the US.“Europe continued to dominate as a region and accounted for 301 640 units, or 75.5%, of the record 399 594 vehicles exported in 2023.“Both advanced and emerging economies are likely to see modest economic growth in 2024, which would support the South African automotive industry’s export performance,” it added.The transition to new energy vehicles (NEVs) also presents opportunities, according to Naacam executive director Renai Moothilal.Speaking at a Trade and Industries Policies Strategies (TIPS) virtual webinar on the Transition to Electric Vehicles, he said NEV subcomponentry with high localisation potential included electric motors and transmissions (e-axle); power electronic subcomponents such as PCB assemblies and housing; and high-voltage electrical distribution components such as wire harnessing.Other opportunities cover hydrogen fuel cells, thermal management systems and high-voltage batteries.The World Bank estimates SA’s electric battery value chain has the potential to sustain 58 000 jobs by 2030.
