The document discusses the establishment of joint teams between multiple OEMs in South Africa to increase local content from auto suppliers. It provides examples of opportunities identified by the teams to further localize production of components such as body pressed parts, interior textiles, exterior plastic parts, and electrical/electronic components. The teams aim to improve competitiveness of local suppliers and consolidate business to increase commonality between OEMs. Challenges include maintaining local content as technology advances and developing supplier capabilities in South Africa.

1. 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

2. Current Breakdown of costs and
Local Content
XX%: % 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

3. Joint OEM Initiative
To 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

4. Approach: 5 Joint
OEM Teams
• Chassis and Drivetrain
• Electrical / Electronic
• Exterior
• Interior
• Body

5. 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

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. Challenges & Opportunities
• Maintaining local content on new models with high
levels of new technology
• Global excess capacity of many suppliers
• Supplier development capabilities of local
organisations?
• Team member participation
• Fast track introduction of certain new suppliers
through acquisition of existing suppliers