The Minister of Trade, Industry and Competition, Mr Parks Tau, has told delegates attending the South African Auto Week opening session, that government remains committed to transformation, localisation and transition to the new energy vehicles to advance the sector.
The 3-day event is held at the International Convention Centre (ICC) in Durban led by Naamsa | The Automotive Business Council in conjunction with the KwaZulu-Natal government and the Department of Trade, Industry and Competition (the dtic). The event is aimed at facilitating high-level dialogue between industry leaders and government policymakers to shape regulatory frameworks, support local manufacturing, and address sector challenges
Tau emphasised during his address that transformation and competitiveness are not in tension.
“An industry that draws on all of its people, and on a broad and capable supplier base, is a stronger industry. It is more resilient to shocks, more responsive to its customers and more deeply rooted in the country that hosts it and localisation is where transformation becomes real. Every imported component that we learn to make here is an opportunity for a new supplier, a new investment and new jobs,” he said.
He added government is moving to put in place instruments to anchor the vision of transformation and localisation and to ensure that emerging companies of the previously disadvantaged citizens are not left behind in the transition to new energy vehicles.
“The transition to new energy vehicles is a chance to do things differently. Batteries, electric drive units, power electronics, thermal systems and charging equipment are new value chains. They are still being built. Black-owned and women- owned firms can enter them at the start, as owners and partners, rather than at the margins,”
He reasserted the significance of the current review of the Automotive Production and Development Programme 2 (APDP2).
“I have been clear that the programme must reward manufacturing in South Africa, not assembly alone, and must support component manufacturers. A 150% investment allowance now applies to qualifying investment in electric and hydrogen vehicle production.
Through the Automotive Investment Scheme, the Industrial Development Corporation (IDC), the National Empowerment Fund (NEF) and our other development finance institutions, we will continue to support investment in the supplier base,” he said.
He admitted that there are challenges that continue to bedevil the sector.
“Some component manufacturers, black-owned and otherwise, are under real pressure from imports, energy and logistics costs and weaker demand. Some have closed. We cannot speak about transformation without also speaking about keeping this base alive. To this end, we are pursuing the Africa Automotive Pact through the Association for African Automotive Manufacturers (AAAM) and our partners in Egypt and Algeria. This mechanism will give life to the AfCFTA and enhance our diversification agenda as we access new markets for growth,” he concluded.