The Automotive Industry (manufacturing and retail) contributes at least 6% to the country’s Gross Domestic Product and the sector exports constitute almost 12% of total exports. This was announced by the Minister of Trade and Industry (the dti), Rob Davies. He was speaking this evening at the opening of the Johannesburg International Motor Show at MTN Expo Centre, outside Johannesburg.
Davies said that all this has been possible due to the support that government provided to the industry mainly under the Motor Industry Development Programme (MIDP). The minister told the gathering that the MIDP which is to be replaced by a new programme, the Automotive Production and Development Programme (APDP) in 2013, has achieved a lot.
‘Still under MIDP, the total investment of at least R4 billion is to be made during 2011 whilst more than R32 billion has been cumulatively invested since year 2000. Also an estimated 90 000 people are directly employed in automotive manufacturing (at least 20 000 jobs were lost since 2008), whilst about 200 000 are employed in retail and aftermarket’ said Davies.
The key objectives of the APDP amongst other include stimulating expansion of automotive vehicle production to 1.2 million vehicles per annum in 2020 with the associated deepening of the components industry and to make a larger positive contribution to the balance payment.
According to him, South Africa has not been immune to the recent global economic crisis that resulted in a global collapse in demand and lower production volumes leading to massive job-losses in the automotive industry, to the extent that it threatened the existence of some of the major international automotive producers.
However, Minister Davies added that the automotive sector will also benefit with the new preferential procurement regulations, which will come into effect on 7 December 2011.
These regulations will empower the dti to designate specific industries, of critical and/or strategic importance where such tenders should prescribe that only locally manufactured products will be considered or that only locally manufactured products with a prescribed minimum threshold for local content will be considered.
‘Government is also embarking on a procurement effort in support of local production. In the automotive industry we are looking at designating buses for local procurement wherein we would seek for government and state agencies to buy locally manufactured buses. We may also include other categories of vehicles’ said Davies.
Davies has reiterated that the designation of products is part of government plan to leverage procurement in order to raise domestic production and employment.
Enquiries:
Sidwell Medupe
Tel: (012) 394 1650
Mobile: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
