The South African Automotive Masterplan to 2035: Policy challenges post-2020

Transcription

1 The South African Automotive Masterplan to 2035: Policy challenges post-2020 Prepared for the NAACAM Show, International Convention Centre, Durban, 5th of April, 2017

2 Presentation outline 1. The South African Automotive Masterplan (SAAM) process 2. South African automotive industry vision and objectives 3. The SAAM s six pillars and two foundations 4. Enabling policy post-2020: Critical SAAM considerations 5. Stakeholder engagement and SAAM completion process

3 1. The South African Automotive Masterplan process

4 Five phase project to develop SAAMP to 2035 and complete APDP review and post 2020 policy recommendations

5 Phase 5 completion process

6 2. South African automotive industry vision and objectives for 2035

7 SA automotive industry vision and objectives: 2035 A globally competitive and transformed industry that actively contributes to the sustainable development of South Africa s productive economy, creating prosperity for industry stakeholders and broader society. 1. Grow SA vehicle production to 1% of global output 2. Increase local content in SA assembled vehicles to 60% 3. Double total employment in the auto value chain 4. Improve auto industry competitiveness levels to that of leading international competitors 5. Transformation of the South African automotive value chain 6. Deepen value addition within SA auto supply chains

8 2035 objectives and associated impact on the SA auto industry Objective 1. Grow SA vehicle production to 1% of global output 2. Increase local content in SA assembled vehicles to 60% 3. Double employment in the auto value chain 4. Improve industry competitive levels to that of leading international competitors 5. Transformation of the South African automotive value chain 6. Deepen value addition within SA auto value chains Estimated impact on SA auto industry CBU production to 1.39m units annually (129% higher than 2015 levels) Increase total value of vehicle production to R314bn Increase of R135bn on 2015 local content levels 55% local content increase per vehicle produced Employment growth of 112,000 Aggregate employment from 112,000 to 224,000 Sustainable auto industry based on comparative price and non-price competitiveness Sustained export competitiveness 25% Black-owned involvement at T2 and T3 component manufacturer levels, as well as in dealership networks and authorised repair facilities Amplified skills development of Black South Africans Enhanced employment equity at senior management, artisan and professional employment levels across automotive value chain Growth of auto component exports and production for the aftermarket at the same rate as CBU local content increases Growth in R&D/other innovation metrics within the SA auto value chain

9 SAAM projections (constant 2015 Rand values) KPIs Passenger vehicles (units) LCVs M&HCVs Total vehicles Avg. value of SA vehicles Value of production (Rm) Local content (%) Local content value (Rm) Employment (61% productivity deflator) 2015 (base) 341, ,974 24, , , , , , , ,049 27, , , , , , , ,737 31, , , , , , , ,501 36,760 1,138, , , , , , ,232 42,615 1,391, , , , ,000

10 3. The SAAM s six pillars and two foundations

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12 4. Enabling policy post-2020: Critical SAAM considerations

13 Enabling policy post 2020 three critical thoughts: 1. Is the SAAM vision and its associated objectives realizable? 1% of global output Industry transformation 60% local content 1.2m unit domestic market 2 nd and 3 rd tier supplier development Dynamic regional market Technical skills development

14 Enabling policy post 2020 three critical thoughts: 2. Is the existing APDP policy structure enabling in respect of the SAAM s vision and objectives? CBU and CKD tariff structure Volume Assembly Allowance Production Incentive Automotive Investment Scheme CBU assembly Scale Localisation Advanced technology

15 The SAAM opportunity Quantifying the benefits of local vs % base: R68 billion in economic GVA (more than doubling present auto industry impact) 49,000 additional direct jobs, with strong multipliers 61% productivity deflator conservative estimation methodology

16 Enabling policy post 2020 three critical thoughts: 3. What is the relationship between the SAAM s six pillars and its two foundations? Institutions Policies Programmes

17 4. Policy completion and stakeholder engagement process

18 Phase 5 completion process