Automobile industry growing the South African economy

The development of South Africa’s auto industry is critical to the government’s economic development strategy, but the effects of the epidemic forced car manufacturers and dealers into survival mode making their ambitious growth strategies of the government almost out of reach. This year, however, is proving to be a great year for the South African automotive industry as it receives a boost from Ford South Africa and Toyota South Africa Motors respectively. The plans recently announced by the two organisations promise to take the country a step closer to achieving the South African Automotive Masterplan goals that the government had set.

The National Association of Automobile Manufacturers of South Africa (NAAMSA) has put its automotive masterplan at the heart of efforts to resuscitate development through industrialisation after years of inactivity, to bring unemployment down from almost 30%. The plan aims to increase growth and generate employment by expanding the industry’s annual production to 1.4 million vehicles by 2035 and increase the quantity of auto components made locally to 60% from 39%. The investment by Ford South Africa and Toyota are key to the realisation of this daring idea adopted in the masterplan and the targets set out.

Ford Motor Company of Southern Africa

Ford Motor Company of Southern Africa announced that it will invest R15.8 billion to renovate and upgrade its Silverton plant in Gauteng, as it prepares to manufacture the next-generation Ranger bakkie for local and export markets. The R15. 8 billion investment is projected to generate 1200 new jobs at the plant with an additional 10 000 across the supply chain. It will also lead to an upsurge in production capacity at the plant from the current 168 000 to over 200 000 units per annum.

The extensive renovations, upgrades and new advanced engineering technologies will drive effectiveness across the entire South Africa procedure – from sequenced delivery of parts direct to the assembly line, to increased vehicle production line speeds and precision of assembly to ensure the world-class quality that customers expect. Ford expects the new Ranger to go into production in 2022.

Toyota South Africa Motors

After pledging to invest more than R 2.5 billion in the production of a new passenger car at the Presidential Investment Summit in November 2019, Toyota South Africa Motors (TSAM) recently announced that it will invest R 3 billion in South Africa for the manufacturing of the new Corolla Cross sport utility vehicle (SUV) at its engineering plant in Prospecton near Durban, South Africa. The compact SUV, based on the new-generation Corolla sedan and hatchback, will start local production in October 2021, with the investment generating about R 2.85 billion in additional component purchases in the South African economy, creating 1 500 jobs.

These investments are set to transform the automobile industry in South Africa and will place it amongst top countries with world class engineering facilities in the continent and globally. They will not only take production processes in South Africa to a new level to fully meet the local demand and boost the South African economy, but will also grow the local supply base and give the opportunity to export proudly South African – built vehicles to the continent and beyond.