Localisation targets are proving hard to meet
Ambitious plans to increase local content in SA-made vehicles have failed to meet expectations so far, but Renai Moothilal, executive director of the National Association of Automotive Component & Allied Manufacturers , believes a recovery is just around the corner.
Latest news is that Toyota hopes to be up and running again in September, when it will work flat out to claw back some lost production — particularly of its Hilux bakkie, SA’s best-selling vehicle. Add in the imminent launch of the new Ford Ranger bakkie, with higher local content than its predecessor, and Moothilal thinks the industry average for 2022 could creep over 40% by the end of the year.
Whether it will reach 60% by the 2035 target date is questionable. Moothilal is among industry leaders to have described 60% as a vision rather than a set-in-stone goal. Some of SA’s seven major vehicle manufacturers have said they are unlikely to ever reach 60% — meaning others would have to exceed it by a big margin to maintain the industry average.
Instead, they have agreed to fund the AITF and help create black development elsewhere in that chain, primarily in components and vehicle retail. Some multinational components companies, equally opposed to giving up control of SA subsidiaries, have applied to the department of trade, industry & competition to also pay into the AITF.
What also can’t be hurried, apparently, is the DTIC’s decision on a policy to encourage the local production and sale of electric vehicles . It should have published a policy white paper last year, outlining its proposed timetable for a shift away from the internal combustion engine . Moothilal takes a more conciliatory view. He points out that masterplan incentives for vehicle and components manufacturers don’t distinguish between ICE and EV technologies. Whichever they use, companies can claw back up to 30% of production- and employment-related new investments.
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