SOUTH AFRICA’S components industry is able to supply original equipment manufacturers in both the east and west. The R50-billion a year sector contributes around 2% to the South African gross domestic product (GDP). National Association of Automotive Component and Allied Manufacturers executive director Roger Pitot says that, while local sales are in the slow lane, exports are starting to show substantial growth. Most recently, Ford South Africa announced that it had secured the contracts to supply a newgeneration diesel engine and components from its Struandale engine plant to the world, as well as a new pick-up truck that is aimed at both the local and export markets. Pitot says Naacam expects other vehicle manufacturers will announce their own export programmes in the near future. This means that production numbers should remain unchanged for this year, but “will increase substantially from next year”. Fuelling the exports is a weaker rand. “Exports of component parts have been under pressure over the last year, because of a stronger rand. But with a sudden weakening of the currency, components producers find themselves 10% more competitive with overseas markets than they were a few months ago. “While this type of volatility is difficult to manage, it gives the industry two advantages in Component exports revving up Catalytic converters dominate with a value of R15-billion Fast Facts ● Contributing 2% to GDP ● Exports starting to show substantial growth ●Weaker rand makes component producers 10% more competitive ● Catalytic converters dominate with a value of R15-bn that it creates a more competitive export market and helps local industry compete against cheaper imports,” says Pitot. According to the DTI, South Africa’s component exports in 2006 were dominated by catalytic converters, with a value of R15-billion; followed by stitched leather components (R2.5-bn); tyres (R1.2- bn); engines (R1.2-bn); engine parts (R984-million), silencers and exhausts (R880-million); road wheels and parts (R681-million), car radios (R377-million); axles (R375-million) and radiators (R365-million). According to Naacam, the component supplier industry invested R3-billion in plant and equipment during 2006, which was an increase of 30% on 2005. This could grow once there was clarity on the Motor Industry Development Plan incentives.
