As Rob Lord, Safmarine’s ‘Mr Auto’ considers the challenges and opportunities facing the automotive industry in 2010, he adds his support to the sentiments expressed by Naamsa president David Powels at the SA Automotive Week conference held in October last year. Powels told delegates that local content must increase from less than 40% to over 70% if the auto industry is to survive. Lord believes that growing South Africa’s auto support industries and expertise will not only grow the local auto industry as a whole, but also auto exports from South Africa. “Substantial investments have already been made in growing our local manufacturing base and increasing the number of locally manufactured, fully built up vehicles exported from South Africa. “A reduction in import volumes combined with the increase in export volumes will also go some way to addressing the current imbalance of the trade, which is costly to both shipping lines and OEMs,” says Lord. “Reducing the number of vehicle components that need to be imported will also help reduce overall manufacturing costs as transport currently accounts for a large percentage of the OEMs’ procurement budget.” Last year South African auto exports dropped by almost 40%, partly due to the collapse of global markets but also because South Africa was unable to compete on cost with the auto manufacturers in Asia. However, Lord says the news that Ford Motor Company of South Africa (FMCSA) plans to invest R1.5 billion in the local production of a newgeneration Ford pick-up as well as the manufacture of the Puma diesel engine (scheduled to start production this year), bodes well for the local industry. “Not only is Ford looking to produce large volumes (around 70-90 000 units per annum) but the company also plans to export around 70% of the locally produced vehicles to ‘new’ overseas auto markets in the Northern hemisphere and supply parts to South America. The bulk of South Africa’s auto exports currently move to ‘traditional’ markets such as Europe and the USA. “While the increased exports are good news for shipping, it is equally good for South Africa as the Ford replacement pick-up and Puma engine projects will create jobs and boost skills,” says Lord. The Puma diesel engine is currently being manufactured in Turkey but South Africa is being earmarked as a major supplier. Lord says FMCSA will produce around 270 000 Puma units, of which approximately one third will be for local use in the replacement pick-up production and the balance of two thirds for export.
