The motor industry - a country on its own

Many will remember travelling on South Africa’s roads 40 years ago when traffic was so light that one flashed lights to say hello to oncoming vehicles on country roads. All that has changed, with millions more vehicles now on the road – and not only in South Africa. Put all the world’s vehicle manufacturing in one place and it would be the sixth-largest economy in the world. It takes more than eight million people to produce the parts and assemble some 66 million vehicles a year, according to the International Organisation of Motor Vehicle Manufacturers (OICA). This is over 5% of the world’s total manufacturing employment. In addition to these direct workers, about five times more are employed indirectly in related manufacturing and service provision, such that an estimated more than 50 million people earn their living from cars, trucks, buses and coaches. That includes the millions working in freight forwarding, clearing, shipping, warehousing and transport industries – the people who literally keep the wheels rolling. Global statistics are hard to come by, but an indication of the contribution of the auto industry to the logistics sector is given by Ceva, formerly known as TNT Logistics. The company was an early entrant in China, in 1988, and established its first automotive logistics joint venture, Anji-Ceva Automotive Logistics, with SAIC Motor Corporation in Shanghai in 2002. The joint venture employs more than 10 300 people, operating 25 vehicle centres, 15 regional distribution centres and 14 parts warehouses all over China, covering more than 250 cities, serving 465 suppliers and 2 200 dealers. China is now the world’s largest auto market, with 12.3 million new cars being sold in the first seven months of 2013 – putting the industry on track for sales of 20 million a year. Even though it is dwarfed by China, the auto sector is also one of South Africa’s most important, contributing at least 6% to the country’s GDP and accounting for almost 12% of South Africa’s manufacturing exports – making it the largest contributor to GDP. According to the National Association of Automobile Manufacturers of South Africa, (Naamsa), the industry’s original equipment manufacturers employed 29 900 people at the end of June 2013. CAPTION SA’s auto sector contributes at least 6% to the country’s GDP.