Once a week, a cargo ship packed with hundreds of luxury German cars, destined for the export market, leaves the East London harbour in South Africa’s Eastern Cape province, the heartland of the auto industry.
Similar weekly departures from Port Elizabeth and Durban, South Africa’s other ports on the Indian Ocean, have become commonplace as the country’s auto industry experiences its biggest boom since the mid-1980s. For the first time since 1984, production of cars, trucks and buses rose above the 400 000 unit mark last year, said a report released this week by the National Association of Automobile Manufacturers (NAAMSA).
”Calendar 2001 and the year 2002 to date represented a period of extraordinary upheaval (expansions) in conditions both domestically and internationally,” said NAAMSA, a trade organisation established in 1935 in the interest of the country’s car manufacturers. Some 108 000 of the vehicles made last year were destined for export ? 92 300 units more since 1995, when exports stood at a paltry
15 700 cars.
”If there is a boom in the auto industry, it’s in the export market,” said Alan Johnson, producer of the local Drivetime television programme.
There were several factors bolstering the industry, including government tax breaks, cheaper manufacturing and labour costs locally, and so-called ”specialised manufacturing.” Major manufacturers like BMW, DaimlerChrysler and Volkswagen are now making world-specific models by contract, especially righthand-drive vehicles, for use mainly in English-speaking countries.
”So for instance, BMW will have its 3-series, Volkswagen its Golf 4 and DaimlerChrysler its Mercedes C-class, all right-hand driven cars, manufactured here,” said Johnson. Labour relations have also substantially improved over the past few years, with unions accepting that the motoring industry was the lifeblood for the Eastern Cape province, one of the country’s poorest regions.
In a recent nationwide strike, the three largest manufacturers in the area, DaimlerChrysler, Delta Motor Corporation and Volkswagen said more than 90% of their workers showed up despite the labor action. Another major contributor to the success of the South African auto industry is the government’s Motor Industry Development Plan (MIDP), introduced in September 1995, just more than a year after the country’s first democratic elections in April 1994.
Part of the plan saw a trade-off between government and manufacturers for tax breaks on import duties for certain models, in return for export successes for locally manufactured cars.
”The South African automotive industry … in a relatively short period of time succeeded many of the objectives of the MIDP,” South Africa’s Trade and Industry Minister Alec Erwin said in September 2000.
”Although relatively small in world terms, a number of production facilities indicated that they can compete with the best in the world,” Erwin said.
South Africa is the 18th largest auto-producing country. The United States is the largest, followed by Japan, Germany, France and South Korea. But South Africa’s exports have also triggered a boom in its imports. Exotic imported models can be seen zooming around Johannesburg and Cape Town.
”The import market is definitely still growing,” said the British MG Rover dealership in South Africa’s managing director, Piet Rademeyer.
He said by 2007, an estimated 40% of South Africa’s cars will be imported, on the back of a rise in exports from the country. And said Terry Taylor, representative for the East London harbour, where a car terminal has been built to accommodate exports from nearby DaimlerChrysler factory: ”We have never been this busy. The motor manufacturing has really been the success story of this region.” – Sapa-AFP