SA’s automotive component manufacturers warn of further job losses if govt does not intervene

Government needs to intervene urgently to prevent further job losses in the automotive component manufacturing sector, says the National Association of Automotive Component and Allied Manufacturers (NAACAM).

Association CEO Renai Moothilal told Parliament during a portfolio committee meeting that the sector is facing significant deindustrialisation risks,with the targets of the South African Automotive Masterplan (SAAM) falling short of expectations across all key performance indicators.

During the session, the International Trade Administration Commission of SA (ITAC) said that along with investigating increasing tariffs on imported cars to 50%, it is also considering hiking those on motor vehicle components to 30%.

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In conversation with Stephen Grootes, Moothilal says incrased tariffs on imports are one way to provide some stability to the domestic market.

He highlights that there are also other measures that they believe can drive greater localisation and bigger economic opportunities in the value chain.

Here, Moothilal refers to the APDP incentive programme which he says could benefit from a level of recalibration. The Automotive Production Development Programme is aimed at supporting the vision of the South African Automotive Masterplan to create a globally competitive and transformed automotive industry.

"For a long time, the level of domestic rebates that the original equipment manufacturers (OEMs) have been earning have been surplus to their own import needs and these find their way through a trading mechanism to independent importers, including the plethora of brands that we've seen coming into the market over the last decade."

"You've got great choice as the South African consumer, but we're knocking up job losses every few months to the extent that in the components space we've closed 13 plants over the last two years and I'm aware of two more coming up."