Profile of Who We Are• Established 1980• Over 180 members with 260 plants• Members comprise 70% of dedicated auto component manufacturing companies in SA• Independently elected President and two Deputy Presidents, and 4 Executive Committee members• 5 Regions with Chairmen and Deputy Chairs – quarterly meetings for members in each region
Current Breakdown of costs and Local ContentXX%: % of total material cost YY%: true local material plus value add as % of total material cost Exterior Electrical / Electronic 10% •Glass •Harnesses •Paint •Starter motors 19% 3% •Bumpers •Alternators •Mirrors •Wiper systems •HVAC 5% Interior 23% •Cockpit Body •Seats •Door panels 7% 15% •Carpets •Bonnets 6% •Bootlids •Sideframes •Axles •Doors •Differentials Chassis and Drive-train •Drive shafts 33% 14% •Brakes
Joint OEM InitiativeTo Increase Local Content: • Improve local suppliers’ competitiveness - Develop local suppliers (including Tier 2/3) - Consolidate local supplier base - Consolidate OEMs’ business (increase commonality of local suppliers) • Align existing OEM technologies and / or specifications wherever possible • Attract new technologies and / or suppliers
Approach: 5 Joint OEM Teams• Chassis and Drivetrain• Electrical / Electronic• Exterior• Interior• Body
Team Approach• List all commodities per Commodity Group• Analyse commodities, e.g. - Local vs. import - High value commodities not available in SA - Local commodities with high import content - Local commodities available locally but suppliers not well supported or well developed• Select high priority projects and assign project leaders & team members• Selective engagement of suppliers• Meet regularly, track progress
Opportunities - Body• Pressed part localisation: investigating potential for further localisation of under body, skin panel and reinforcement parts as well as hand brakes• Steel supply chain cost: looking for opportunities to optimise costs throughout the steel supply chain• Press shop JV with international partners: facilitating various JV’s with multinational partners• Localisation of BTR material for hot forming: looking to replace imported BTR steel with local equivalent. Local equivalent already approved overseas, local testing due for completion by October 2010.
Opportunities - Interior• Localisation of cloth and other textiles. Headliner material lamination trials in progress.• Plastic injection moulded seat profiles. One OEM has approved local sourcing, others investigating.
Opportunities - Exterior• Increase local raw materials (Polypropylene) in local injection moulded plastic parts. OEMs studying potential for commonisation of PP specs and in discussions with potential supplier.• Automotive paints products: looking to increase local raw materials in various locally produced paints products.• Weather strips localisation: phase 1 would be limited to importation of extrusions with local cutting to size and then assembly; phase 2 would include local moulding of extrusions. Several OEMs in RFQ process with potential supplier.
Opportunities - Chassis• Driveshafts: looking to re-establish manufacturing of driveshafts in SA following closure of only local manufacturer in May 2009.• Brake calipers: investigating potential to deepen localisation by localising castings, machining and plating.
Opportunities – Electrical/Electronic• Instrument clusters: localisation of certain sub-components plus local assembly. Potential local supplier negotiating technical support agreement with global supplier.• Evaporator core: local supplier negotiating with global supplier for localisation of coating technology.• Motors and Alternators: increase local content by identifying suitable local Tier 2 & 3 aluminium die castings suppliers.• Trailer module: investigating the potential for a local supplier to supply a common trailer module to several OEMs.• Batteries: AGM battery manufacturing facility at local supplier being commissioned.• Vehicle harnesses: investigating opportunity to develop Tier 2 and 3 suppliers to localise competitive aluminium cables and wires as well as Halogen free wire.
Challenges & Opportunities• Maintaining local content on new models with highlevels of new technology• Global excess capacity of many suppliers• Supplier development capabilities of localorganisations?• Team member participation• Fast track introduction of certain new suppliersthrough acquisition of existing suppliers