South Africa’s Auto Industry Receives $71Million Boost

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Written by Ann Brown

Vrooom! “South Africa’s automotive industry will see several firms investing over 71 million dollars in setting up plants and expanding operations,” reports CNBC Africa.

“Toyota SA would be investing approximately 33.2 million dollars in a parts distribution warehouse and a new assembly line in Durban. German auto component group, Friedrich Boysen GmbH is putting 16.4 million dollars in a new 10,000 square metre plant and Beijing Automotive Works to stake 17.9 million dollars in a plant expected to service the whole of sub-Saharan Africa,” noted the United Nations Economic Commission for Africa (ECA) report.

BMW is investing heavily — it will add a third shift at its plant and also Mercedes Benz SA which began a workforce recruitment program.

“The automotive and components industry accounts for 30 per cent of South Africa’s total manufacturing output,” head of the National Association of Automotive Manufacturers of South Africa, Johan van Zyl said.

The industry contributes at least six percent to the country’s gross domestic product and accounts for nearly 12 percent of its manufacturing exports.

South Africa’s auto industry includes Toyota, Renault, BMW, Ford, General Motors, Nissan, Mercedes Benz, MAN, DAF Trucks and Tata, among others.

The automobile industry’s success story is due to the government’s 1995 policy – the Motor Industry Development Plan (MIDP).

“Upon inception of this policy, these figures jumped from 388,442 in 1995 to 532,545 in 2011. Exported units jumped from 15,764 in 1995 to 272,457,”reports CNBC Africa.

“The government policy that encourages a proactive approach has helped to drive development in this sector,” read the ECA’s Dynamic Industrial Policy in Africa report.