The government must amend its support for the industry if SA is to avoid being marginalised in a post-Covid-19 global motor industry, says Prof Justin Barnes, one of the chief architects of government’s long-term strategy for the SA motor industry.years of progress in turning the SA industry into an effective global competitor may be undone if the industry is unable to respond to changing conditions caused by the pandemic.
The immediate priority, says Barnes, is to provide clarity on restarting vehicle assembly. He said local motor companies should be allowed to restart the manufacture of export vehicles as soon as possible. The SA motor industry exports about 64% of vehicle production. While companies are in the dark about when they can go back to work, some other countries are already making plans.
He says: “General production could then commence once operational learnings have been bedded down and firms have proved they have controls in place to operate at higher capacity levels.” Without a return to work, industry bodies have warned in recent days of the potential wholesale collapse of small and medium companies, mainly in the components supply industry. The lockdown is starving them of income and cashflow.
Barnes says the resultant loss of local content in SA-made vehicles will reverse gains achieved in the last two years, and reduce APDP incentives that have attracted nearly R50bn in foreign investment since 2013. A further R40bn has been committed, in principle, over the next few years — though some of that will now be delayed.
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