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Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
Automotive localisation  aidc
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Automotive localisation aidc

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Presented at the UNIDO-SPX Rhythm meeting on 29 September.

Presented at the UNIDO-SPX Rhythm meeting on 29 September.

Published in: Business, Technology
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  • 1. UNIDO Rhythm Meeting<br />Lance Schultz<br />29 September 2011<br />
  • 2. Index<br />Feedback on benchmarks<br />Current Local Content Levels in SA Automotive Industry<br />Strategic Challenges in SA Local Content<br />Challenges in Expanding and Deepening Local Content<br />A strategic model for competiveness<br />Competiveness in the SA Automotive Industry <br />
  • 3. Current Status<br />NAACAM UNIDO benchmarking has resulted in 8 benchmarks including 2 benchmarks in WC region. The balance of the 2 for the EC region should be completed, October 2011, which will make the target of 10.<br />The GP benchmarks (10)-outsourced to H.Viljoen, and is still WIP.<br />An opportunity remains to do at least 4 benchmarks in the KZN area, which is being pursued by the EC .<br />On average, it takes 3 months from the time the first contact is made until the benchmark is complete at a company. <br />Many NAACAM members have been reluctant or disinterested in participating, largely citing lack of time to participate.<br />
  • 4. Way Forward<br />Should the program be extended - include non NAACAM members as well?<br />At the moment, the NAACAM pool of opportunity is exhausted and not much more members to market toward, hence the above suggestion. Perhaps - like Agri?<br />If the AIDC EC is contracted to do another 10 - 15 benchmarks, would strongly suggest that other industries in the EC be considered. At least in this way, we can achieve the desired targets.<br />Alternatively, NAACAM provides list indicating who is willing to participate - this being based on some intervention on their part where they nominate their members who want a benchmark.<br />
  • 5. 65%: % of total material cost 35%: true local material plus value add as % of total material cost<br />Note: %’s indicative only, still being verified &amp; vary by model and by OEM<br />Exterior<br /><ul><li> Glass
  • 6. Paint
  • 7. Bumpers
  • 8. Mirrors</li></ul>10%<br />Electrical / Electronic <br /><ul><li> Harnesses
  • 9. Starter motors
  • 10. Alternators
  • 11. Wiper systems
  • 12. HVAC</li></ul>19%<br />3%<br />5%<br /> Interior<br />23%<br /><ul><li> Cockpit
  • 13. Seats
  • 14. Door panels
  • 15. Carpets</li></ul>Body <br />9%<br />15%<br /><ul><li> Bonnets
  • 16. Bootlids
  • 17. Sideframes
  • 18. Doors
  • 19. Axles
  • 20. Differentials
  • 21. Drive shafts
  • 22. Brakes</li></ul>6%<br />Chassis and Drive-train<br />Source: Toyota SA: Dr J.van Zyl<br />33%<br />14%<br />
  • 23. Have to potentially have a SA Car to increase sustainability <br />AFRICAR<br />
  • 24. Electrical / Electronic <br />Exterior<br /><ul><li> Lack of common </li></ul> specifications across OEMs<br /><ul><li> Lack of competitive suppliers
  • 25. Volumes / economies of scale
  • 26. Frequently changing technology
  • 27. Distance from design centres
  • 28. Low R&amp;D spend and dev.</li></ul>Interior<br /><ul><li> Differing raw materials </li></ul> specs (resins, carpets)<br /><ul><li> Differing technologies</li></ul>Body<br /><ul><li> Local steel quality
  • 29. Local steel specifications
  • 30. Investment costs
  • 31. Differing OEM </li></ul> specifications<br /><ul><li> Local steel quality
  • 32. Local steel specifications</li></ul>Chassis and Drive-train<br />
  • 33. Localisation of the Automotive Industry <br />Competitiveness within the automotive sector are linked to a set of internal/external factors.<br />EC Localisation achievements - 2009/10<br />OEM 1 = 70%<br />OEM 2 = 59%<br />EC OEM’s Future targets – 2014<br />OEM 1 = 80%<br />OEM 2 = 64%<br />Barriers to increasing localisation;<br /><ul><li>Limited supply base
  • 34. Supplier competitiveness
  • 35. Economies of scale
  • 36. Small, independent suppliers - risky
  • 37. Macro environment</li></ul>Supplier development challenges;<br /><ul><li>Resistance to change
  • 38. Global quality standards
  • 39. Lean manufacturing
  • 40. Lack of technical skills
  • 41. 2nd / 3rd tier suppliers not competitive</li></li></ul><li>Competiveness in the SA Automotive Industry <br />Factors affecting our supplier competitiveness<br />Competitiveness within the automotive sector are linked to a set of internal/external factors.<br />External Factors include;<br /><ul><li>Government Policy
  • 42. Exchange Rate Regime
  • 43. Import parity Pricing
  • 44. Socio-economic
  • 45. Access to funds</li></ul>Internal Factors include;<br /><ul><li>Productivity
  • 46. Quality Standards
  • 47. Internal Processes
  • 48. Cost
  • 49. Leadership &amp; Change Management
  • 50. Adherence to international standards
  • 51. Labour Skills
  • 52. Equipment</li></ul>There are many factors that could directly or indirectly affect the competitiveness of sector. The question is which factors contribute the most to competitiveness within the internal environment of manufacturers. This is the space with which various initiatives could impact.<br />(UnidoTirisano Programme SWOT analysis 2010, Crafting and executing strategy, Johan Hough, 2010)<br />
  • 53. THE END<br />Questions?<br />

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