SA motor industry will face greater competition

The South African motor industry needs to take urgent action if it is to continue attracting foreign investment and ward off increasing international competition, according to global professional services firm PricewaterhouseCoopers.

International analysts at Autofacts, a division of the PricewaterhouseCoopers Global Automotive Group, have studied the global impact of the developing motor industries in China, Russia, Poland and other emerging nations in Asia, Eastern Europe and Latin America.

Michael Weidokal, lead analyst for emerging markets at Autofacts, said on Thursday: “There is no doubt that it will be an increasing challenge in future to attract foreign investment to maintain the growth of South Africa as a global source for automotive components, materials and assembled vehicles.”

The study illustrates that the Chinese, East Europeans and Latin Americans are all chasing the same euros, dollars and yens at a time when the global motor industry faces serious over-capacity problems.

The roles of the assemblers who control the global automotive brands and their suppliers who control much of the technology to build new generation vehicles, are changing drastically.

These and other issues will be discussed in a series of strategic business briefings in Johannesburg on October 24 and 25, where executives of local automotive companies will be briefed on the realities of the rapidly changing global automotive investment climate and new challenges facing South Africa.

Also under the spotlight will be the positive steps already being taken, including the extension of South Africa’s Motor Industry Development Programmes (MIDP) through to 2012, and industry efforts to tackle crime, HIV/Aids and the ability of South Africa to manufacture with the new materials and techniques required for next generation vehicles.

Said Weidokal: “The achievements so far under MIDP have been remarkable. South Africa has established international credibility for its ability to supply products reliably to required quality levels and at competitive prices.

“But as South Africa heads for another record year for automotive exports, there is serious competition emerging for a share of global automotive investment funding.”

Autofacts is a team of over 5 000 professionals located in more than 75 countries who comprise PricewaterhouseCoopers’ Global Automotive Practice, providing global industry outlooks and identifying growth patterns in both the mature and developing markets. - Sapa

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