South Africa’s motor industry will be on the skids if component manufacturers do not become more competitive, warns Volkswagen South Africa managing director David Powels. “There is only one way in which the automotive manufacturing industry in South Africa will be able to survive in the medium- to long-term – by securing much higher levels of local content,” he says. According to Powels, there is an approximate 20% gap in competitiveness between South African companies and Western Europe component suppliers. “The gap widens to more than 30% when comparing South African automotive manufacturing cost structures to those in emerging automotive power houses such as India, China and Russia”. “The existing domestic supplier base will have to significantly improve processes,” he said.
