ISUZU Motors South Africa has invested R580m to support the growth of local automotive component manufacturers and drive transformation in the automotive sector.
Over 100 suppliers have been fitted with machinery and equipment to manufacture components for the automotive giant and at least 235 new jobs at local component manufacturers have been created.
New sourcing strategy aims to grow local component manufacturers
The automotive giant embarked on a new sourcing strategy together with local suppliers in 2018. The company’s localization process aligns with the South African Automotive Master Plan’s (SAAM) target to increase local value addition to 60% by 2035.
For ISUZU Motors South Africa, the localization process presents a massive opportunity to support the participation of black-owned automotive suppliers in the supply chain.
According to Billy Tom, President and CEO of ISUZU Motors South Africa, “Localisation is essential to the transformation of the automotive sector. The automotive industry could see growth in vehicle production from 600,000 to 1.4 million vehicles a year by 2035.
“This presents a huge opportunity for us to support black-owned automotive suppliers in building their businesses in the industry, and it will help to drive transformation and create jobs,” says Tom.
Acoustex is a 73 percent black-owned supplier based in Gqeberha. The business has been awarded both the sound and carpet assembly contracts for the new D-MAX bakkie. Acoustics manufactures smaller boot liners, and has assisted ISUZU Motors South Africa achieve an industry first with the installation of locally-made vinyl mats.
“We have to do things differently if we are to draw on local content, and Acoustics is an example of drawing on local content and capabilities. Over the past decades, design capability has transitioned to being more multinational, so we have to get involved locally,” says Komane Pitso, ISUZU Motors South Africa Senior Vice President Commercial Operations.
Speed of localization critical to future-proofing supply chain
“Great strides have been made in the alliance between the automotive industry and government. Progressive automotive policies in South Africa are testament to the strength of government and industry collaboration.
“But this isn’t enough. The automotive industry faces tough challenges in accelerating localisation and developing a future-proof supply chain. Without localisation the automotive industry will struggle to remain competitive,” says Pitso.