ED RICHARDSON GLOBAL SHIFTS in the auto industry are driving the future of the motor industry in South Africa which is emerging as a test track for new and old auto companies alike. The country has an almost unique mix of first-world and emerging markets – high-speed freeways, potholed roads, gravel roads and many kilometres of little more than dirt track. To the north, the roads and support infrastructure look increasingly like that of India, China, the Philippines and South America. It is also a largely untapped market of over nine billion consumers (14% of the world’s population), who together account for less than 2% of global auto sales. Eastern companies have seen the opportunities. One of the first to move in after the 1994 elections was Indian group Tata Holdings. Its Johannesburg offices are the headquarters for all Tata operations in Africa. “Success in South Africa is a benchmark for the African continent,” says Raman Dhawan, managing director of Tata Africa Holdings . “If a product sells here, it will sell in the rest of Africa.” “With first-world markets saturated, Africa is one of the few regions left that provides motor companies with the potential for growing their volumes substantially in the future and Hyundai’s intent is to utilise this potential by providing world class products and services at affordable prices,” states Hyundai on its South African web page. The strategy is working. Tata says its medium commercial range is now the second best seller in the South African market and Tata Zambia is the leader in the medium commercial vehicles segment. Unofficial Hyundai sales statistics show that they are accelerating rapidly in South Africa. The face of the local passenger car market is also changing. Naamsa, estimates that imports of mainly Korean, Chinese and Indian cars rose by over 29% from 2005 to 2006. More low-priced Chinese models are expected to be introduced into the country during 2007. Industry analysts say the success of these imports signals the end of any attempts to produce an affordable range of South African-designed cars for the African market. Volkswagen’s 1974 Citi Golf is now the only South African-made entry-level car. It was the fourth most popular car in South Africa through 2006. Dr Johan van Zyl, president and chief executive of Toyota South Africa and president of Naamsa, says the future success of the local motor industry should be linked to producing one million vehicles a year by 2010.
