South Africa’s automotive industry is poised to grow for at least the next decade, an automotive analyst said on Thursday.
Michael Weidokal of PricewaterhouseCoopers, one of the world’s largest professional services organisations, said his prediction was based on a number of advantages the industry enjoyed in South Africa.
One of these was South Africa’s reputation for high quality automotive products — a reputation that the country had developed over the past few years.
”South Africa is exporting more advanced automotive products than most other automotive centres like China, Brazil, Turkey, the country’s major competitors,” said Weidokal.
He said this, combined with the country’s access to the key automotive markets such as the United States, Germany and Australia, had made South Africa a primary automotive export centre.
Weidokal is in the country for meetings arranged to coincide with the Auto Africa exhibition, which ended last week.
He said the industry’s success was also the result of broad-based international investment that had targeted all areas of the automotive industry in South Africa.
”It should carry on that way for at least the next decade,” he said, but cautioned that a number of critical risk factors could threaten the industry’s growth.
According to Weidokal, the domestic market in South Africa was growing much slower than many other emerging markets and political and economic risks remained a serious threat and deterrent to investors.
”Perhaps most importantly, a number of new automotive centres are growing in other regions of the world, threatening to compete for investment with South Africa and offering a number of attractive incentives for automotive investment,” he said.
Weidokal also said that South Africa’s cost advantages were being threatened by Aids-related expenses but he denied that the pandemic would result in the country losing its key advantages in the industry over the next decade.
”In South Africa at least over the next decade the industry will continue to grow despite the impact of Aids. Aids is one of the reasons why companies here need to focus on exports because the domestic market here is unlikely to grow.
”The driving age in the country will start to decline as the aids epidemic claims lives and so exports will become even more important for the future growth of the industry,” he said. – Sapa