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SUMMER INTENRSHIP PROJECTCARRIEDOUT AT“NATIONAL ENGINRRRING INDUSTRIES LTD.JAIPUR [RAJ]”MJRP UNIVERSITY JAIPURSUBMITTED BY...
ACKNOWLEDGEMENTNATIONAL ENGINEERING INDUSTRY Ltd. Is considered one ofthe best bearing manufacturing firms in entire Asia....
DECLARATIONI, Surendra Kumar Saini student of B.B.A [2008-2011], MJRP UniversityJaipur. Here by declare that this project ...
OBJECTIVE“To Identify the various aspects of marketing of bearing inGlobal Market & associate the opportunity in South Afr...
sector accounts for about 10% of South Africas manufacturingexports, making it a crucial cog in the economy.With annual pr...
UK (12%) and the US (11%). African export destinations includeAlgeria, Zimbabwe and Nigeria.InvestmentAll of the major veh...
GeneralMotorsGeneral Motors South Africa, which is based in Port Elizabeth in theEastern Cape, markets the brands Chevrole...
VolkswagenVolkswagen South Africa is located at Uitenhage near Port Elizabeth inthe Eastern Cape. In 2007, the company cel...
Competitive advantagesSouth Africas automotive industry offers a number of competitiveadvantages to international concerns...
Germany, Spain, the UK, the US, France and sub-Saharan Africa arethe leading destinations for South African auto parts exp...
Competitive Environment and International BusinessEXTERNAL INFLUENCES                 OPERATIONS    PHYSICAL AND  SOCIETAL...
The Usual Pattern of Internationalism                                                                         Internal ver...
Chapter Preview• List each key factor to assess in national  business environments• Discuss measuring potential in emergin...
Identify Basic Appeal Basic Basic            Available                   Availabledemanddemand            resources       ...
National Forces: Political/Legal                Government regulation                   Investment barriers              ...
National Forces: Economic/Other                 Country finances                 Trade and                  investment p...
National Forces: e-Business              Infrastructure,              market access                 Internet access      ...
Potential: Industrialized Markets Demographics Competitors’    market shares Import/Export    volumes Distribution   n...
Department                                   of                           CommerceExport                       Import     ...
Potential: Emerging Markets   Market size   Market growth rate   Market intensity   Market consumption capacity   Com...
Select the Market or Site      Field trips• Engage in negotiations• Gain firsthand exposure• Contact customers/others     ...
Market Research DifficultiesAvailability   Comparability    Cultural of data         of data       problems
Secondary Data SourcesInternational organizationsGovernment agenciesIndustry/Trade associationsService organizationsIntern...
Methods of Primary Research   Trade shows and missions   Interviews and focus groups            Surveys    Environmental s...
Review• List each key factor to assess in national  business environments• Discuss measuring potential in emerging and  in...
Comparison of Foreign Market Entry Modes             Conditions Favoring this Mode                                       A...
High sales potential                                          of 2 companies.             Some political risk             ...
SOUTH AFRICA ECONOMY SYSTEMEconomySA recession unlikely: Old MutualDespite gloomy forecasts for inflation and economic gro...
South Africas automotive industry•   South Africas automotive industry is a global, turbo-charged engine    for the manufa...
manufacturers such as BMW, Ford, Volkswagen, Daimler-Chrysler andToyota have production plants in the country, while compo...
2007/2006  Sector                2003     2004     2005     2006     2007                                                 ...
South Africa has established itself as a centre of growth in Africa and is on targetto become an increasingly important pa...
a series of recent international reports highlighting and supporting the countrys strengths    as an investment destinatio...
There is free exchange of trade between South Africa and the otherfour countries (Botswana, Lesotho, Namibia, and Swazilan...
•   General rebates of duty are available for specific situations, and           duties may be rebated on goods on re-expo...
•   Wholesalers    Consumer goods requiring maintenance of stocks and industrial raw    materials are often exported to So...
•   Agents & distributors       In South Africa, the terms "agent" and "distributor" have a very       specific meaning.Ag...
• Various Bearing companies in South africa  • Company ProfileThe SKF Group is the leading global supplier of products, cu...
SKF has 100 manufacturing sites distributed all over the world. Withits own sales companies in 70 countries, supported by ...
Creating stable processesSix Sigma is about creating stable processesDesign for Six Sigma and Lean Six SigmaSix Sigma at S...
Products & ServicesMechanical > Bearings, Bushes & Wheels >  •   Automotive Bearings  •   Ball and Roller Bearings  •   Ba...
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Summer _intership__project

  1. 1. SUMMER INTENRSHIP PROJECTCARRIEDOUT AT“NATIONAL ENGINRRRING INDUSTRIES LTD.JAIPUR [RAJ]”MJRP UNIVERSITY JAIPURSUBMITTED BY: SUBMITTED TO:Surendra Kumar Saini CORDINATOR MJRP UNIVERSITY
  2. 2. ACKNOWLEDGEMENTNATIONAL ENGINEERING INDUSTRY Ltd. Is considered one ofthe best bearing manufacturing firms in entire Asia. The technologyused here is considered most advanced. So training at N.E.I. has beengreat experience of my life. I was exposed to new and advancedtechnology and right kind of industrial training and industrialatmosphere.I would like to express my sincere thanks to Technical TrainingCentre N.E.I for carrying out my two months industrial training atsuch a prestigious organization.I would like to pay my gratitude to Mr. D.K Sharma [Manager, HRD]for his guidance and support. I am extremely grateful and convey mydeep sense of gratitude to Mr. Binoy Verghese ,& Mr Annunay to myproject guide ,Mrs. Monika Joshi and Mr Pradeep Dixit for theirsuppprt and professional assistance because of which I haveopportunity to understand the technical aspects and appreciate the richprofessional culture more carefully. Surendra Kumar Saini
  3. 3. DECLARATIONI, Surendra Kumar Saini student of B.B.A [2008-2011], MJRP UniversityJaipur. Here by declare that this project report titled “GlobalMarketing” has been originally prepared by me and pertains to myoriginal work done during the summer training tenure, for “NationalEngineering Industries Ltd., Jaipur “. One copy of this project reporthas been submitted to NEI other than that this report has not beensubmitted to any other organization. Surendra Kumar Saini
  4. 4. OBJECTIVE“To Identify the various aspects of marketing of bearing inGlobal Market & associate the opportunity in South AfricanMarket”. • South Africas automotive industrySouth Africas automotive industry is a global, turbo-charged enginefor the manufacture and export of vehicles and components. The
  5. 5. sector accounts for about 10% of South Africas manufacturingexports, making it a crucial cog in the economy.With annual production of 535 000 vehicles in 2007, expected to riseto 630 000 in 2008, South Africa can be regarded as a minorcontributor to global vehicle production, which reached 73-million unitsin 2007.But, locally, the automotive sector is a giant, contributing about 7.5%to the countrys gross domestic product (GDP) and employing around36 000 people.The government has identified the automotive industry as a keygrowth sector, with the aim of increasing vehicle production to 1.2-million units by 2020, while significantly increasing local content at thesame time. • Growth • Investment • Ford, GM, Mercedes-Benz, Toyota, VW ... • Motor Industry Development Programme • Competitive advantages • Auto component manufacturers • Spoilt for choiceGrowthSouth Africa has been one of the best performing automobile marketsin the world in recent years. New vehicle sales figures soared torecord-breaking levels for three years in succession, from 2004 to2006. In 2006, sales increased by 14.4% to just under 650 000 units,generating revenue of R118.4-billion.Sales dropped by 5.4% in 2007, and are expected to drop further in2008 as higher interest rates and rising prices curb spending.However, major export programmes are likely to keep the localindustry buoyant. Vehicle exports were around 170 000 units in 2007,and the National Automobile Association of South Africa (Naamsa)expects this to jump to 285 000 in 2008. This is extraordinary growth,especially when compared to 1997, when the number of units exported was below 20 000.South Africa currently exports vehicles to over 70 countries, mainlyJapan (around 29% of the value of total exports), Australia (20%), the
  6. 6. UK (12%) and the US (11%). African export destinations includeAlgeria, Zimbabwe and Nigeria.InvestmentAll of the major vehicle makers are represented in South Africa, as wellas eight of the worlds top 10 auto component manufacturers andthree of the four largest tyre manufacturers. Many of the majormultinational companies use South Africa to source components andassemble vehicles for both the local and overseas markets.Between 2000 and 2006, the industrys investment in production andexport infrastructure quadrupled, from R1.5-billion to R6.2-billion,before slowing to R3-billion in 2007. Capital investment is expected tobe around the R4-billion mark in 2008.Most of this has been foreign investment, with the parent companiesof local car manufacturers expanding local operations to improveproduction capacity, export facilities and supporting infrastructure.All of the large manufacturers in the country have launched majorexport programmes in recent years - the latest (in January 2008)being Ford Motor Company of South Africa.Ford, GM, Mercedes-Benz, Toyota, VW ...FordIn January 2008, Ford Motor Company of Southern Africa announcedplans to invest more than R1.5-billion to expand its operations inSouth Africa for the production of Fords next-generation compactpickup truck and Puma diesel engine.The local arm of the US car giant said the new investment would startin 2009 and be split between its assembly plant in Silverton, Pretoriaand engine facility in Struandale, Port Elizabeth, with most of thevehicles produced earmarked for export.
  7. 7. GeneralMotorsGeneral Motors South Africa, which is based in Port Elizabeth in theEastern Cape, markets the brands Chevrolet, Opel, Isuzu, Saab,Cadillac and Hummer. In 2005, the company was awarded a six-yearcontract to assemble and export the Hummer H3, resulting in aUS$100-million investment in its Struandale plant.GM South Africa is building a new multimillion-rand vehicle conversionand distribution centre and is investing another R481-million in itsoperations, upgrading its production facilities and tooling in 2008.Mercedes-BenzMercedes-Benz South Africa manufactures Mercedes-Benz andMitsubishivehicles at its manufacturing plant in EastLondon in the Eastern Cape. The companys headquarters are locatedin Gauteng province, from where theMercedes-Benz, smart, Maybach, Mitsubishi Motors, Freightliner,Western Star and FUSO brands are marketed and financed.Mercedes-Benz SA recently spent about R2-billion on upgrading itsmanufacturing plant, and now produces both right- and left-handdrives versions of the latest Mercedes-Benz C-Class car for domesticand export markets.ToyotaToyota South Africa recently completed a five-year, R2.4-billionmodernisation and revitalisation programme. Its Prospecton facility,just south of Durban, is now one of the most technologically advancedToyota facilities in the world outside of Japan, and is capable ofproducing around 220 000 units a year.As a global production facility, Toyota South Africa has transformedfrom a purely local supplier into an effective export base to supplyvehicles into markets in Europe and Africa. The company, whichexports to more than 40 destinations, says it expects to export around140 000 units in 2008, or almost 60% of total automotive exportsfrom South Africa.
  8. 8. VolkswagenVolkswagen South Africa is located at Uitenhage near Port Elizabeth inthe Eastern Cape. In 2007, the company celebrated its 56thanniversary in South Africa - and its 2.5-millionth vehicle off theproduction line. It is a local leader in the passenger market,accounting for around 21% of all new vehicle sales.Between 2000 and 2008, Volkswagen South Africa invested aroundR6-billion in new models, a new paint shop and a new truck and busassembly plant.Motor Industry Development ProgrammeThe catalyst for this phenomenal growth has been the governmentsMotor Industry Development Programme (MIDP). Introduced in 1995,the programme is legislated until 2009 and will be gradually phasedout until 2012.The MIDP has boosted exports by enabling local vehicle manufacturersto include total export values as part of their local content total, thenallowing them to import the same value of goods duty-free. This hasallowed auto makers to concentrate on manufacturing certain vehiclesor components for export, while importing other models.The programme also grants a production-asset allowance to vehiclemanufacturers that invest in new plants and equipment, giving them20% of their capital expenditure back, in the form of import-dutycredits, over a period of five years.The government plans to introduce a successor to the MIDP, which willbe aimed aimproving the domestic value chain. The new programme,which will last until 2020, will focus on value addition while beingconsistent withSouth Africas multilateral obligations. It is likely to take the form of asubsidy to production.The Department of Trade and Industry says the new supportprogramme will result in more jobs as well as the long-termsustainability of the industry. The plan will support production andinvestment plans that "intend to reach a minimum volume of outputfor each platform of 50 000 units a year within a reasonable period oftime".
  9. 9. Competitive advantagesSouth Africas automotive industry offers a number of competitiveadvantages to international concerns. These include a world-beatingcost ability on short- or low-volume runs, competitive tooling costs,and a high degree of manufacturing flexibility. The local industry alsohas good access to southern hemisphere and African markets.The South African industry boasts several unique technologies, such asdifferential locks for off-road vehicles, aluminium welding technologyfor radiators, and the ability to design components, such as aircleaners and air conditioners that can cope with the highertemperatures and dust levels in Africa.The countrys first-world production facilities are coupled with accessto raw materials and relatively cheap electricity, as well as stabletransport and telecommunications infrastructure.The Automotive Industry Development Centre and the Gerotec testingcentre near Pretoria are world-class facilities for research, design,testing and training.New investment opportunities are being created for the industry by theintroduction of free trade agreements with the European Union and theSouth African Development Community, as well as the USgovernments African Growth and Opportunity Act.Auto component manufacturersThere are more than 200 automotive component manufacturers inSouth Africa, and upwards of another 150 that supply the industry ona non-exclusive basis. The component industry has a turnover of aboutR50-billion, or approximately 2% of the countrys GDP, and is lookingto strong growth as export potential continues to increase.South Africa exported R30.3-billion worth of auto components in 2006,a 32% increase over 2005. Catalytic converters continued to be thecountrymost exported vehicle part, accounting for almost half of allcomponenexports.Other key exports include engines, silencers and exhausts, radiators,wheels and tyres, stitched leather car seat covers, car radios andsound systems, and axles, especially for heavy trucks.
  10. 10. Germany, Spain, the UK, the US, France and sub-Saharan Africa arethe leading destinations for South African auto parts exports.Spoilt for choiceThere are a "staggering" 1 390 variants of cars, recreational vehiclesand light commercial vehicles on South Africas showroom floors,according to a report by business website Fin24.com.The choice available has more than doubled over the past 10 years. In1997, soon after the re-entry of Alfa Romeo, Renault and Chevroletinto South Africa - and when locals first got a taste of Mahindra,SsangYong, Dacia, Kia, Hyundai, Daewoo, Saab and Subaru - therewere 37 manufacturers offering 595 different models.Since then, Bentley, Cadillac, Citroën, Dodge, Maybach, Mini, Proton,TVR, GWM, Lexus and Tata have established dealerships in SouthAfrica, either independently or by joining forces with establisheddistributors and related group companies.However, despite the new entrants, the majority of South Africanbuyers tend to choose the well known, established brands such asToyota, Volkswagen, Ford, Mazda and BMW. These brands togetherstill account for more than 80% of new vehicle sales in the country.
  11. 11. Competitive Environment and International BusinessEXTERNAL INFLUENCES OPERATIONS PHYSICAL AND SOCIETAL FACTORS OBJECTIVES COMPETITIVE ENVIRONMENT• Major advantage in price, STRATEGY marketing, innovation, or other factors• Number and comparative capabilities of competitors• Competitive differences by country MEANS 1-11
  12. 12. The Usual Pattern of Internationalism Internal versus Impetus for HIGH external handling of international A foreign operations business B Active search MEDIUM Company handles for opportunities its own foreign operations Passive LOW Other firms response to handle external proposals Domestic contracts Business Limited foreign Moderately production and Quite Limited similar multiple functions similar foreign Mode of E Very One functions, operationsDegree of Extensive C dissimilar usuallysimilarity Several production export/between abroad with importforeign and FDI and all Manydomestic functionscountries D Number of foreign countries in which a firm does business 1-13
  13. 13. Chapter Preview• List each key factor to assess in national business environments• Discuss measuring potential in emerging and industrialized markets• Identify three key market research difficulties• Explain the usefulness of each secondary data source• Describe each method of primary research
  14. 14. Identify Basic Appeal Basic Basic Available Availabledemanddemand resources resources••Climate Climate ••Labor Labor••Absolute bans Absolute bans ••Materials Materials ••Financing Financing
  15. 15. National Forces: Political/Legal Government regulation  Investment barriers  Profit repatriation Government bureaucracy  Administrative delays Political stability  Unforeseen political change
  16. 16. National Forces: Economic/Other  Country finances  Trade and investment policies  Currency and liquidity  Logistics  Country image
  17. 17. National Forces: e-Business Infrastructure, market access  Internet access  Content and standards Legal matters  Privacy and security  Intellectual property Financial issues  Electronic payments  Tariffs and taxation
  18. 18. Potential: Industrialized Markets Demographics Competitors’ market shares Import/Export volumes Distribution network Marketing approaches Retail sales levels Income elasticity
  19. 19. Department of CommerceExport Import Data BankImport :: Country-wiseDated: 27/6/2008Values in US$ Million 2007-200 2006-200S.No. Country %Share 8(Apr- %Share %Growth 7 Jun)1. SOUTH AFRICA 2,469.73 1.3306 1,008.98 1.7847 185,604.1 Indias Total Import 56,535.40 0Exchange rate:2006-2007: 1US$ = Rs. 45.28492007-2008(Apr-Jun) : 1US$ = Rs. 41.2344
  20. 20. Potential: Emerging Markets Market size Market growth rate Market intensity Market consumption capacity Commercial infrastructure Economic freedom Market receptivity Country risk
  21. 21. Select the Market or Site Field trips• Engage in negotiations• Gain firsthand exposure• Contact customers/others Competitor analysis • Access to inputs • Competitors’ numbers/shares • Competitors’ strategies • Channel access • Customer loyalty
  22. 22. Market Research DifficultiesAvailability Comparability Cultural of data of data problems
  23. 23. Secondary Data SourcesInternational organizationsGovernment agenciesIndustry/Trade associationsService organizationsInternet and World Wide Web
  24. 24. Methods of Primary Research Trade shows and missions Interviews and focus groups Surveys Environmental scanning
  25. 25. Review• List each key factor to assess in national business environments• Discuss measuring potential in emerging and industrialized markets• Identify three key market research difficulties• Explain the usefulness of each secondary data source• Describe each method of primary research
  26. 26. Comparison of Foreign Market Entry Modes Conditions Favoring this Mode Advantages Disadvantages Mode Limited sales potential in target country; little product Trade barriers & adaptation required Minimizes risk and tariffs add to costs. investment. Distribution channels close Transport costs to plants Speed of entry Exporting Limits access to local High target country Maximizes scale; information production costs uses existing facilities. Company viewed as Liberal import policies an outsider High political risk Import and investment barriers Lack of control over Minimizes risk and use of assets. Legal protection possible in investment. target environment. Licensee may become Speed of entry competitor. Licensing Low sales potential in target country. Able to circumvent Knowledge spillovers trade barriers Large cultural distance License period is High ROI limited Licensee lacks ability to become a competitor. Joint Import barriers Overcomes Difficult to manage Ventures ownership Large cultural distance restrictions and Dilution of control cultural distance Assets cannot be fairly Greater risk than priced Combines resources exporting a &
  27. 27. High sales potential of 2 companies. Some political risk licensing Potential for learning Government restrictions on Knowledge spillovers foreign ownership Viewed as insider Partner may become a Local company can provide Less investment competitor. skills, resources, required distribution network, brand name, etc. Greater knowledge Import barriers Higher risk than other of local market modes Small cultural distance Can better apply Requires more specialized skillsDirect Assets cannot be fairly resources andInvestment priced commitment Minimizes knowledge spillover High sales potential May be difficult to manage the local Can be viewed as an Low political risk resources. insider
  28. 28. SOUTH AFRICA ECONOMY SYSTEMEconomySA recession unlikely: Old MutualDespite gloomy forecasts for inflation and economic growth over thenext 12 to 24 months, Old Mutual believes South Africa is unlikely toexperience a recession, due to strong public and private sectorinvestment, as well as fast-growing consumption spending by thecountrys public sector.InfrastructureWorld-class infrastructure - including a modern transport network,low-cost energy, and sophisticated telecommunications facilities.Key sectorsManufacturing, automotive, tourism, finance, agriculture, ICT andelectronics ... South Africas economic sectors are primed for growth.Economic policiesSouth Africas macroeconomic policies, regulatory institutions, financialsystem and controls, labour legislation, latest budget statements, andmore.Economic developmentJob creation, skills development, urban regeneration ... South Africa ison an economic development drive.
  29. 29. South Africas automotive industry• South Africas automotive industry is a global, turbo-charged engine for the manufacture and export of vehicles and components. The sector accounts for about 10% of South Africas manufacturing exports, making it a crucial cog in the economy.Manufacturing in South AfricaSouth Africa has developed an established, diversified manufacturingbase that has shown its resilience and potential to compete in theglobal economy.The manufacturing sector provides a locus for stimulating the growthof other activities, such as services, and achieving specific outcomes,such as employment creation and economic empowerment. Thisplatform of manufacturing presents an opportunity tosignificantlyaccelerate the countrys growth and development.Manufacturing in South Africa is dominated by the following industry: • AutomotiveAutomotive industryThe automotive industry is one of South Africas most importantsectors, with many of the major multinationals using South Africa tosource components and assemble vehicles for both the local andinternational markets.Despite its distance from some of the major markets Africa, andparticularly South Africa, produces high quality products at pricescompetitive with other automotive manufacturing and assemblycentres.The South African automotive and components industry is growingrapidly and is perfectly placed for investment opportunities. Vehicle
  30. 30. manufacturers such as BMW, Ford, Volkswagen, Daimler-Chrysler andToyota have production plants in the country, while componentmanufacturers (Arvin Exhust, Bloxwitch, Corning, Senior Flexonics)have established production bases in the country.The industry is largely located in two provinces, the Eastern Cape(coastal) and Gauteng (inland). Companies with production plants inSouth Africa are placed to take advantage of the low production costs,coupled with access to new markets as a result of trade agreementswith the European Union and the Southern African DevelopmentCommunity free trade area. Opportunities also lie in the production ofmaterials (automotive steel and components).South Africas aim is to become an automotive investment destinationof choice. Modernisation and upgrading of key elements in theautomotive industry are required to keep pace to achieve internationalcompetitiveness.Interest rates are currently at historic low levels, reducing the cost ofinvestments. It is significant to note that most major multinationalvehicle manufacturers are currently represented in SA, which meansthat international developments also impact on the country.The outlook for the vehicle industry is bright in terms of both exportsand the domestic market. A key challenge will be to raise localcontent, particularly in the vehicles now being exported in largevolumes. • National Association of Automobile Manufacturers of SA • Automotive Industry Export Council Automotive Industry Development Centre . • Following four successive record years, domestic new vehicle sales during 2007 fell principally on the back of substantially lower new car sales and, during the last quarter, progressive weakness in light commercial vehicle sales.For the year as a whole, primarily due to weakness in the new car market,NAAMSA reported sales had declined by 33 859 units or 5,2% to 612 707vehicles compared to the 646 707 units sold during 2006.NAAMSA annual industry sales by sector, for the past four years, were as follows–
  31. 31. 2007/2006 Sector 2003 2004 2005 2006 2007 % Change Cars 247 259 301 151 376 845 426 822 384 411 - 9,9% Light Commercials 104 884 127 629 160 723 186 664 191 227 + 2,4% Medium 12 243 15 168 + 6,5% 6 372 8 636 14 246 Commercials Heavy Commercials/ 15 163 21 901 + 16,3% 9 955 12 178 18 834 Buses Total Vehicles 368 470 449 594 564 974 646 566 612 707 - 5,2%Sales of new vehicles not reported in detail through NAAMSA added 63 390 units(2006 : 67 759 units) to the 2007 figures comprising 50 222 cars and 13 168 lightcommercial vehicles. This effectively translates into a 2007 aggregate SouthAfrican domestic new vehicle market of 676 097 vehicles – which represents adecline of 5,4%, in aggregate terms, compare to total industry sales of 714 325units in 2006.Despite the year on year decline, the industry’s 2007 overall sales representedthe second highest annual sales total on record. Over the past four years (2004– 2007), nearly 2,5 million new vehicles were sold in South Africa compared toabout 1,5 million vehicles sold over the previous four years (2000 – 2003).Currently, South Africa’s vehicle population was in excess of 8 million vehicles.2007 industry export sales figures, compared to the previous three years, wereas follows – 2004 2005 2006 2007 2008 ProjectionCars 100 699 113 899 119 171 106 485 180 000Light Commercials 9 360 25 589 60 149 64 128 75 000Medium, Heavy Trucks and 448 424 539 647 750BusesTotal Exports 110 507 139 912 179 859 171 260 255 7502007 industry exports at 171 260 vehicles reflected a decline of 8 599 vehicles or4,8% compared to the 179 859 vehicles exported in 2006. The fall was primarilydue to the fact that the Mercedes-Benz factory in East London had beenrefurbished during the year and as a result no vehicles had been produced forexport for about five months during 2007.
  32. 32. South Africa has established itself as a centre of growth in Africa and is on targetto become an increasingly important part of the global automotive industry.South Africa’s track record as a manufacturer and supplier of vehicles andautomotive components has been firmly established over recent years. For2008, industry export sales were projected to exceed 255 000 vehicles. Theprojected substantial increase in exports of South African produced motorvehicles would boost the industry’s total domestic production from 542 000vehicles in 2007 to about 620 000 vehicles in 2008.Policies· State boost for local industryThe Department of Trade and Industry is working with state-owned enterprises to buildthe competitiveness of South African suppliers, to ensure they reap the benefits of themassive infrastructure spending programme under way in the country.How the world rates South AfricaDespite a fair amount of local scepticism - brought on partly by political uncertainty andthe energy crisis - South Africa is maintaining its strong showing in world rankings, with
  33. 33. a series of recent international reports highlighting and supporting the countrys strengths as an investment destination. Budget: SA stays the course Despite a 0.5% drop in projected GDP growth for 2008/09, Finance Minister Trevor Manuel has once more unveiled a "sunny" Budget for South Africa, announcing another surplus, lowered taxes and increased spending as the government moves to tackle skills and infrastructure constraints. Non-compliant listed companies targeted The South African government is to embark on a drive within the next few weeks to ensure that companies listed on the JSE comply fully with employment equity legislation, with the offenders being taken to the Labour Court. BUDGET 2008/09 South Africa stays the course Despite a 0.5% drop in projected GDP growth for 2008/09, Finance Minister Trevor Manuel unveiled a "sunny" Budget for South Africa, announcing another surplus, tax cuts and increased spending to tackle skills and infrastructure constraints. Entry mode in South African market• Regulations for importers South Africa is a member of the World Trade Organization (WTO) and follows the Harmonized System (HS) of import classification.
  34. 34. There is free exchange of trade between South Africa and the otherfour countries (Botswana, Lesotho, Namibia, and Swaziland)comprising the Southern African Customs Union (SACU). There willalso be substantially free trade between South Africa and the EuropeanUnion by 2008 as a result of a Free Trade Agreement. The SouthernAfrican Development Community (SADC) Free Trade Agreement shouldalso allow the free exchange of goods among the 14 countries of theregion when it comes into full effect.Traders are subject to exchange control approval, administered by theSouth African Reserve Bank. The Department of Trade and Industry isalso empowered to regulate, prohibit or ration imports to South Africain the national interest but most goods may be imported into SouthAfrica without restrictions.Import permits are required only for specific categories of goods andare obtainable from the Director of Import and Export. Importers mustpossess an import permit prior to the date of shipment. Failure toproduce a required permit could result in the imposition of penalties. Asummary of main import regulations are: • Certain goods imported into South Africa require an import permit, which may be obtained from the Director of Imports and Exports Control. • The list of goods requiring import permits is specified each year in the annual Import Control Program. • Permits are valid for imports from any country. • Foreign Trade Zones: No Foreign Trade Zones or Free Ports are established in South Africa. • South Africa uses the Harmonised System of Classification. • Samples are dutiable unless they are cut samples of cloth, leather, linoleum and wallpaper in book form and not for distribution as advertising matter. Samples that have no commercial value because of mutilation in some way are also allowed duty-free access. • The South African Government has viewed countertrade as a second-best alternative to be engaged in only when normal trade cannot be conducted. • Bonded warehouses are available at various points of entry. • South African banks can accommodate all international transactions and are situated throughout the country.
  35. 35. • General rebates of duty are available for specific situations, and duties may be rebated on goods on re-export. • The Reserve Bank plays a pivotal role in the economic and financial sectors. • Some imports may require permission from the Department of Agriculture, Health or Environment Affairs. • Specific excise taxes are levied on alcoholic and non-alcoholic beverages, tobacco and tobacco products, mineral waters, some petroleum products and motor vehicles. South Africa is an adherent to the Customs Valuation Agreement negotiated under GATT/WTO. The dutiable value of goods imported into South Africa is calculated on the F.O.B. price in the country of export. In conformance with its WTO commitments, South Africa has lifted import surcharges. Trade with South Africa Trade relations South Africa participates in a number of preferential trade relationships, both regional and bilateral. It was a founding member of the General Agreement on Tariffs and Trade (1947), and is an active member of the World Trade Organisation. Trade with SA: who can help South African chambers of commerce and industry, foreign chambers in SA, and other trade and business organisations geared to offer assistance.• | Distribution & sales in South Africa South Africa offers foreign suppliers a variety of methods to distribute and sell their products, including using an agent or distributor, selling through established wholesalers or dealers, selling directly to department stores or other retailers, or establishing a branch or subsidiary with its own sales force.
  36. 36. • Wholesalers Consumer goods requiring maintenance of stocks and industrial raw materials are often exported to South Africa through established wholesalers.• Retail organisations Many exporters of consumer goods sell directly to South African retail organisations - including consumer corporations, department stores, chain stores, and co-operative groups of independent retailers - which assume the functions of wholesale buying, selling and warehousing.• Consumer retail South Africa offers the full spectrum of retail outlets: neighborhood convenience stores; small general dealers; specialty stores handling a single product line (such as clothing, electronics, or furniture); exclusive boutiques; chain stores (groceries, clothing, toiletries, household goods); department stores; cash and carry wholesale- retail outlets; and co-operative stores serving rural areas. About 90% of the consumer trade inventories of these stores aredomestically sourced.A major phenomenon in South Africa has been the evolution ofsupermarketes or hypermarkets, which sell large quantities of almostall consumer goods on a self-serve basis.The hypermarkets, located in suburban shopping centres, havedisrupted the traditional distribution chain by purchasing directly frommanufacturers and bypassing the wholesaler, with low marginsachieving high turnover, thereby placing price pressure on allcompeting outlets. • After-sales agents For products of a technical nature, it maybe necessary to appoint an official after-sales agent in South Africa. This may be a company that does not import or market the product in question, but rather, because of its geographical reach, technical ability and goodwill in the market, acts as the certified service agent.Appointing an appropriate after sales agent is crucial in ensuring thatthe product develops a respected reputation in the South Africanmarket.The US Commercial Services Country Commercial Guide South Africa2003 offers more information on selling factors and techniques.
  37. 37. • Agents & distributors In South Africa, the terms "agent" and "distributor" have a very specific meaning.Agents. In the strict legal sense, "agent" means a person who, for andon behalf of a principal, either introduces a third party to the principalby soliciting orders from the third party, or concludes contracts withthe third party on behalf of the principal. The normal reward for anagent is a commission, which is received from the principal.Key considerations in appointing an agent in South Africa are: • You need to appoint an agent who knows your market well. The South African business sector is relatively small, and companies have established methods of procurement that differ from sector to sector. • You need to consider national distribution. South Africa is a large country, with nine provinces. Smaller agents tend to operate provincially, as they do not have the infrastructure to support operations in other provinces. You may need to appoint an agent in each of the larger cities - Johannesburg, Cape Town, Port Elizabeth and Durban - to cover each of the respective provinces. Larger companies who take on agencies often have an office in each of the major centres, making any agency agreement easier to control. • For certain products, South Africa is a trading hub for the southern African region, and you need to consider whether your South African agent should handle business in these countries on your behalf.Distributors. A distributor buys and holds stock of a product. Inreturn, s/he is usually granted an exclusive right to sell the product ina particular area or to a particular type of customer. An agreementwith a distributor is similar to an agreement with an agent, except thatprice and delivery terms will differ because the distributor is aprincipal. When appointing a distributor in South Africa, the sameconsiderations apply as when appointing an agent.
  38. 38. • Various Bearing companies in South africa • Company ProfileThe SKF Group is the leading global supplier of products, customersolutions, and services in the business of rolling bearings and seals.The Groups main competencies include technical support,maintenance services, condition monitoring and training. SKF alsoholds an increasingly important position in the market for linearmotion products, as well as high precision bearings, spindles andspindle services for the machine tool industry and lubrication systems.The SKF business is organized into three divisions; Industrial,Automotive and Service. Each division serves a global market, focusingon its specific customer segments.
  39. 39. SKF has 100 manufacturing sites distributed all over the world. Withits own sales companies in 70 countries, supported by some 15 000distributors and dealers worldwide, its e-business marketplace andglobal distribution system, SKF is always close to its customers for thesupply of both products and services.SKF supplies the following products: • Ball and Roller Bearings • Needle Roller Bearings • Ball Bearings Units • O-Rings • Bearings Bushes • Piston Seals • Bearings Housings • Precision Bearings • Bearings Seals • Radial Shaft Seals • Combined Needle Roller • Rod Seals Bearings • Roll End Bearings • Cylindrical Roller Bearings • Roller Ball Bearings • Cylindrical Roller Thrust • Shaft Seals Bearings • Slewing Bearings • Deep Groove Ball Bearings • Slewing Rings • Double Row Deep Groove • Spacing Washers Ball Bearings • Spherical Bushings • Hybrid Bearings • Spherical Roller Bearings • Hydraulic Seals • Spherical Roller Thrust • Industrial Shaft Seals Bearings • Linear Ball Bearings • Taper Roller Bearings • Magnetic Bearings • Taper Roller Thrust Bearings • Mechanical Seals • Thrust Ball Bearings • Mechanical Shaft Seals • Y-Bearings • Mechatronic Bearings Units • Needle Roller Ball Bearings
  40. 40. Creating stable processesSix Sigma is about creating stable processesDesign for Six Sigma and Lean Six SigmaSix Sigma at SKF has been extended to incorporate Design for SixSigma (DfSS) and Lean Six Sigma besides the well establishedtraditional Six Sigma.Awarding workDuring the year of 2006, SKF received a number of awards and forms ofrecognition for its work with Six Sigma. NSK South Africa (Pty) Ltd
  41. 41. Products & ServicesMechanical > Bearings, Bushes & Wheels > • Automotive Bearings • Ball and Roller Bearings • Ball Bearing Units • Bearing Grease • Conveyor Bearings • Hanger Bearings • Linear Way Bearings • Needle Roller Bearings • Pillow Block Bearings • Plane Bearings • Plummer Blocks • Rod and Spherical Bearings • Roll End Bearings • Screw Conveyor Bearings • Screw Conveyor Hanger Bearings • Self Lubricating Bearings • Sleeve Bearings • Slewing Rings • Split Roller Bearings • Steel Balls & Rollers • Super Precision Bearings • Taper Roller Bearings • Thin Section Bearings • Thin Walled Bushes • Turntable BearingsPower Transmission > Plain Bearings > • Air Bearings • Dry Bearings • Magnetic BearingsPower Transmission > Rolling Bearings > • • Ball Bearing Slewing Rings • Ball Bearings: Angular Contact Ball Bearings • Ball Bearings: Deep Groove Ball Bearings

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