Investing into South Africa s Automotive Industry
South Africa at a glance Area 1,22 million km 2 Population 54 020 000 of which 43.3m African (80.2%); 4.77m Coloured (8.8%); 4.5m White (8.4%) and 1.34m Indian (2.5%). Head of the State: President Jacob Zuma 11 Official languages with English the business language Total GDP: R 350.63 bn (2014) Real GDP Growth: 1.4% (2014) GNI per capita: US$ 7,190 (2014) Inflation (CPI): 4.4% (PPI): 5.8% (2014) Main Exports; minerals & mineral products, precious metals & metal products, chemical & food products, automotives & components. Main imports: machinery, transport equipment, finished products, oil, chemical products. Main trading partners: China, USA, Japan, Germany, France & the UK.
South African Economy YEAR 2010 2011 2012 2013 2014 GDP GROWTH 3.1% 3.6% 2.5% 1.9% 1.3% AVERAGE GROWTH RATE IN THE PAST 5 YEARS 1.8% South Africa positioned as a manufacturing centre of excellence Diversified Industrial sectors Open economy Sound business case for investment and profit Gateway to Africa and markets of more than 200 Million consumers Africa is the next big story after China and India
Proximity to markets by sea Liverpool 25 days New York 20 days Buenos Aires 11 days Jeddah 20 days India 10 days Singapore 12 days Hong Kong 25 days
SADC and South Africa SADC FTA signed in August 2008 market of 200 million consumers Future FTA with SADC,COMESA (Egypt) & EAC (Kenya) with a market of 700 million consumers Market size USD 2.6 trillion
Trans-African Highways
South Africa and Italy by numbers
The automotive sector
SA Automotive Industry: structure Japanese vehicle manufacturers represented in SA Nissan/Renault and Toyota are both wholly owned subsidiaries. Other Multinational manufacturers, Mercedes Benz, BMW, VW, General Motors, and Ford are also 100% controlled subsidiaries Other major marques imported European (Peugeot/Citroen), Japanese (Daihatsu, Honda, Subaru), Korean (Daewoo, Hyundai, Kia), Indian (Tata, Mahindra), with Chinese brands recently entering the SA market (Chery, Chana, Foton, GWM) More than 400 auto component suppliers including global first tier suppliers such as Faurecia, Johnson Controls and Benteler
Production of Passenger Cars and Light Commercial vehicles 1995-2014...
SA vehicle exports Africa European Union Australia, Japan, USA USA European Union & Africa
Component manufacturers in South Africa Engine, Transmission and Body Parts Brakes, Wheels, Shock absorbers Suspension, Exhausts, Windscreens Electrical, Batteries & Filters Interiors
Manufacturers of parts and accessories (Components)
2013 Automotive contribution to GDP 7 % Automotive export value Main export destinations Automotive import value Macro economic indicators (Automotive) R 102.7 bn Vehicles: R 60.5 bn; Component: R 42.2 bn Germany, USA, Namibia, Japan, UK Vehicles: R 63.6 bn; Component: R 63.1 bn Main import origin Germany, Japan, Thailand, Brazil, China Automotive exports as % of total exports 11.1 Automotive imports as % of total imports 12.7 South Africa car park 11 100 000 Vehicle production in total Africa 72 % Vehicle exports to Africa 78 787 units to 42 African states Source: SA Reserve Bank, SA Revenue Services, Automotive Industry Council
Production of Passenger Cars and Light Commercial vehicles 1995-2013 Passenger Cars Market Light Commercial vehicles Market Exports Domestic Export Total as % of Total Domestic Export Total Exports as % of Total 1995 233 512 8 976 242 488 3.7% 127 363 6 365 133 719 4.8% 2000 172 373 58 204 230 577 25.2% 104 121 9 148 113 269 8.1% 2008 125 454 19 5670 321 124 60.9% 118 641 87 314 205 955 42.4% 2009 94 379 128 602 222 981 57.7% 85 663 45 514 131 177 34.7% 2010 113 740 181 654 295 394 61.5% 96 823 56 950 153 773 37% 2011 124 736 187 529 312 265 60.1% 108 704 84 125 192 829 43.6% 2012 121 677 153 196 274 873 55.7% 112 118 123 623 235 741 52.4% 2013* 130 000 180 000 310 000 58.1% 120 000 180 000 300 000 60% *2013 Projected rates
Key Performance Indicators Activity 1995 2012 Capital Expenditure by OEM s R847 million R4,7 billion Export value (Vehicles & Components) R4,2 billion R86,9 billion Total Vehicles Exported (Units) 15 764 277 893 Productivity (Av vehicles produced per employee) 10,0 18,5 Auto Industry Contribution to GDP 6,5% 7,0% Export destinations for vehicles and components 62 152 Total vehicles produced 389 392 539 538 Total new vehicle sales 399 967 624 035 Models with production volumes > 40 000 0 5 Source: AIEC
Destination Value of Automotive exports % of total automotive exports EU 35.1 bn 32.4 TDCA NAFTA 19.0 bn 17.6 AGOA Free Trade Agreement AFRICA 30.2 bn 27.9 Tri-partite FTA SADC 21.9 bn 20.2 FTA MERCOSUR 2.0 bn 1.9 PTA South Africa s total automotive exports of R 108.2 billion in 2013
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The Automotive Production & Development Programme (APDP)
Automotive Production and Develoment Programme (APDP) The APDP: 4 pillars to support and develop motor industry Stable import tariffs of 25% for CBUs; 20% for CKD components Vehicle Assembly Allowance (VAA): manufacturers with a minimum plant volume of 50 000 pa allowed to import a percentage of their components duty free (20% decreasing to 18% over 3 yrs) Production Incentive (PI): allowance for duty free import of vehicles or components, calculated at: 55% of value added in SA supply chain reducing to 50% over 5 years Special dispensation for vulnerable industries Automotive Investment Scheme (AIS) A taxable cash grant paid over 3 years with min benefit calculated at 25% An additional 5% and 10% benefit subject to Economic Benefit criteria Available to OEMs and component suppliers To stimulate investment and job creation in SA s automotive sector; investment in technologically advanced automotive production & new and replacement models/ components; increased plant production volumes & strengthen the automotive value chain
Thank you! Contact details: South African Consulate-General Vicolo san Giovanni sul Muro, 4 2012 Milan Tel. +39 02 8858581 Ms. Marcella Uttaro Marketing Officer Department of Trade and Industry E-mail: MUttaro@thedti.gov.za