Investing into South Africa’s Automotive
Industry
South Africa at a glance
•Area 1,22 million km2
•Population 54 020 000 of which 43.3m African (80.2%);
4.77m Coloured (8.8%); 4.5m White (8.4%)
and 1.34m Indian (2.5%).
•Head of the State: President Jacob Zuma
•11 Official languages with English the business language
•Total GDP: R 350.63 bn (2014)
•Real GDP Growth: 1.4% (2014)
•GNI per capita: US$ 7,190 (2014)
•Inflation (CPI): 4.4% (PPI): 5.8% (2014)
•Main Exports; minerals & mineral products, precious
metals & metal products, chemical & food products,
automotives & components.
• Main imports: machinery, transport equipment,
finished products, oil, chemical products.
•Main trading partners: China, USA, Japan, Germany,
France & the UK.
South African Economy
YEAR
2010
2011
2012
2013
2014
GDP GROWTH
3.1%
3.6%
2.5%
1.9%
1.3%
AVERAGE GROWTH RATE IN THE PAST 5 YEARS
1.8%
•South Africa positioned as a manufacturing centre of excellence
•Diversified Industrial sectors
•Open economy
•Sound business case for investment and profit
•Gateway to Africa and markets of more than 200 Million consumers
•Africa is the next big story after China and India
Proximity to markets by sea
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Liverpool – 25 days
New York – 20 days
Buenos Aires – 11 days
Jeddah – 20 days
India – 10 days
Singapore – 12 days
Hong Kong – 25 days
SADC and South Africa
• SADC FTA signed in August 2008 –
market of 200 million consumers
• Future FTA with SADC,COMESA
(Egypt) & EAC (Kenya) with a market of
700 million consumers
•Market size USD 2.6 trillion
Trans-African Highways
South Africa and Italy by numbers
The automotive sector
SA Automotive Industry: structure
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Japanese vehicle manufacturers
represented in SA – Nissan/Renault
and Toyota are both wholly owned
subsidiaries.
Other Multinational manufacturers,
Mercedes Benz, BMW, VW, General
Motors, and Ford are also 100%
controlled subsidiaries
Other major marques imported –
European (Peugeot/Citroen),
Japanese (Daihatsu, Honda, Subaru),
Korean (Daewoo, Hyundai, Kia),
Indian (Tata, Mahindra), with Chinese
brands recently entering the SA
market (Chery, Chana, Foton, GWM)
More than 400 auto component
suppliers including global first tier
suppliers such as Faurecia, Johnson
Controls and Benteler
Production of Passenger Cars and Light
Commercial vehicles
1995 - 2014
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.
•
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SA vehicle exports
Africa
Australia, Japan, USA
European Union & Africa
European Union
USA
Component manufacturers in South Africa
Engine, Transmission
and Body Parts
Brakes, Wheels,
Shock absorbers
Suspension,
Exhausts,
Windscreens
Electrical,
Batteries &
Filters
Interiors
Manufacturers of parts and accessories (Components)
Macro economic indicators
(Automotive)
2013
Automotive contribution to GDP
7%
Automotive export value
R 102.7 bn
Vehicles: R 60.5 bn; Component: R 42.2 bn
Main export destinations
Germany, USA, Namibia, Japan, UK
Automotive import value
Vehicles: R 63.6 bn; Component: R 63.1 bn
Main import origin
Germany, Japan, Thailand, Brazil, China
Automotive exports as % of total exports
11.1
Automotive imports as % of total imports
12.7
South Africa car park
11 100 000
Vehicle production in total Africa
72 %
Vehicle exports to Africa
78 787 units to 42 African states
Source: SA Reserve Bank, SA Revenue Services, Automotive Industry Council
Production of Passenger Cars and Light Commercial vehicles 1995 - 2013
Passenger Cars
Light Commercial vehicles
Domestic
Export
Total
Exports
as % of
Total
1995
233 512
8 976
242 488
3.7%
127 363
6 365
133 719
4.8%
2000
172 373
58 204
230 577
25.2%
104 121
9 148
113 269
8.1%
2008
125 454
19 5670
321 124
60.9%
118 641
87 314
205 955
42.4%
2009
94 379
128 602
222 981
57.7%
85 663
45 514
131 177
34.7%
2010
113 740
181 654
295 394
61.5%
96 823
56 950
153 773
37%
2011
124 736
187 529
312 265
60.1%
108 704
84 125
192 829
43.6%
2012
121 677
153 196
274 873
55.7%
112 118
123 623
235 741
52.4%
2013*
130 000
180 000
310 000
58.1%
120 000
180 000
300 000
60%
Market
*2013 Projected rates
Market
Domestic
Export
Total
Exports
as % of
Total
Key Performance Indicators
Activity
1995
2012
Capital Expenditure by OEM’s
R847 million
R4,7 billion
Export value (Vehicles &
Components)
R4,2 billion
R86,9 billion
Total Vehicles Exported (Units)
15 764
277 893
Productivity (Av vehicles produced
per employee)
10,0
18,5
Auto Industry Contribution to GDP
6,5%
7,0%
Export destinations for vehicles and
components
62
152
Total vehicles produced
389 392
539 538
Total new vehicle sales
399 967
624 035
Models with production volumes
> 40 000
0
5
Source: AIEC
Destination
Value of Automotive
exports
% of total
automotive
exports
Free Trade
Agreement
EU
35.1 bn
32.4
TDCA
NAFTA
19.0 bn
17.6
AGOA
AFRICA
30.2 bn
27.9
Tri-partite FTA
SADC
21.9 bn
20.2
FTA
MERCOSUR
2.0 bn
1.9
PTA
South Africa’s total automotive exports of R 108.2 billion in 2013
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The Automotive Production & Development
Programme (APDP)
Automotive Production and Develoment
Programme (APDP)
The APDP: 4 pillars to support and develop motor industry
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Stable import tariffs of 25% for CBUs; 20% for CKD components
Vehicle Assembly Allowance (VAA): manufacturers with a minimum plant volume
of 50 000 pa allowed to import a percentage of their components duty free (20%
decreasing to 18% over 3 yrs)
Production Incentive (PI): allowance for duty free import of vehicles or
components, calculated at:
• 55% of value added in SA supply chain reducing to 50% over 5 years
• Special dispensation for “vulnerable” industries
Automotive Investment Scheme (AIS)
• A taxable cash grant paid over 3 years with min benefit calculated at 25%
• An additional 5% and 10% benefit subject to Economic Benefit criteria
• Available to OEMs and component suppliers
• To stimulate investment and job creation in SA’s automotive sector; investment
in technologically advanced automotive production & new and replacement
models/ components; increased plant production volumes & strengthen the
automotive value chain
Thank you!
Contact details:
South African Consulate-General
Vicolo san Giovanni sul Muro, 4
2012 Milan
Tel. +39 02 8858581
Ms. Marcella Uttaro
Marketing Officer
Department of Trade and Industry
E-mail: [email protected]