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SOPA underlines importance of auto industry to Eastern Cape

Home Manufacturing & Processing Automotive SOPA underlines importance of auto industry to Eastern Cape

PREMIER Oscar Mabuyane’s state of the province address (SOPA) at the Bhisho legislature, recently underlined the importance with which the Eastern Cape provincial government viewed its automotive sector.

That’s according to Thabo Shenxane, CEO of the Automotive industrial Development Centre Eastern Cape (AIDC EC), who welcomed this recognition of the sector’s contribution to socio-economic development in the region.

“The acknowledgement of the sector’s significant contribution and the Premier’s commitment to supporting automotive sector growth, is very positive. It is also well placed as the Eastern Cape automotive supply chain alone produces over 40% of the country’s vehicles and accounts for 60% of its automotive exports,” Shenxane said.

In his speech, the Premier noted investment of R3.3 billion in Buffalo City Metro, from 16 investors linked to Mercedes-Benz SA’s new C-Class W206 project and two new investments from original equipment manufacturers (OEMs), with Isuzu investing R1.2 billion, “effectively rescuing half of the jobs that would have been lost when General Motors de-invested in SA”. Ford had also committed to investing R600m in its Gqeberha plant to modernise and grow its local operations.

These announcements follow the R13-billion announcement by MBSA two years ago and R6 billion by VW in 2018/19. These are also investments that the sector continues to make into the province every seven years when there is a change to a new vehicle model.

The Premier noted that “the presence of these OEMs has contributed to the growth of tier one, two and three automotive suppliers … providing over 55,000 jobs in the province”.

Shenxane cautioned that the Province’s support for the automotive sector should already begin to strategically include preparation for the sector to be globally competitive in new energy vehicle technology.

“Should the internal combustion engine technology that we export from the Eastern Cape to Europe becomes redundant in our export markets, as it is anticipated to be, who have to aggressively pursue new energy vehicles, the Eastern Cape economy is at risk.’’

He added that closer partnerships between the AIDC EC, local original equipment manufacturers and the Department of Trade, Industry and Competition was critical.

He also suggested that funding be directed at research and the development of new energy vehicle labs and incubators to position the province not only as a traditional manufacturing powerhouse in Africa but as the centre of new energy vehicle technology in Africa.

“This has to be a vision to ensure the future of the automotive sector as a revenue stream and job creator in the Eastern Cape.”

Also good news for the region’s automotive sector, Shenxane said, was the Premier’s assertion that the Province was “engaging” Transnet over more improvements to the East London harbour, as part of Transnet’s R1-billion investment in developments at the port.

“Expansion of the port is central to export efficiency and will move towards both matching and encouraging Mercedes’ ongoing investments in its East London plant.”

Shenxane said other pertinent comments included the Premier’s recognition of the importance of energy security, however he urged the Province to play a more proactive role in accelerating additional generation capacity and reducing red tape to ensure reliability of supply.

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