The Thai automotive industry is the ideal role model for survival for South Africa, delegates at the AIDC Conference in Port Elizabeth were told.
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South Africa’s auto industry is structured around a basic shape of one million units of production, half for the domestic market and half for export. This puts it in the same bracket as several other world markets.
South African government planners have looked hard at Australia’s auto industry – which once had similar size and scale ambitions, but which has singularly failed to achieve them through a combination of unfavourable government policies and models with limited appeal outside the domestic market.
“The Australian market was destroyed by a rapid reduction in duties,” said Stewart Jennings, CEO of SA-based supplier PG Group and current president of NAACAM, the suppliers’ trade body.
A better example to follow is Thailand rather than Australia, Jennings believes. “Australia is a failed market but Thailand is thriving, because the Government set clear targets,” he said.
Brand Pretorius, CEO of McCarthy Holdings, South Africa’s largest auto retailer, agreed that Thailand was “a very good example” for South Africa to follow.
“Thailand got its production levels up to 1 million units a year – including 500,000 exports – with high local content levels.”
Thailand focused on specific vehicle types – mainly pick-ups, though it has more recently shifted the focus to small, economical cars – precisely the types of vehicle that most senior executives believe South Africa should focus on.
“There needs to be more of a focus on B-sector and sub-B cars, as well as more 1-tonne pick-ups,” said Johan Van Zyl, head of Toyota South Africa, as these were the right sort of cars both for its domestic market and for export.
Mark ‘Coolbear’ Bursa
