South Africa’s trade and industry minister is meeting carmakers to discuss a rescue package to help limit job losses, a government spokesperson said on Tuesday.
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About 22,500 jobs are on the line in the automotive and component manufacturing sector, the National Association of Automotive Manufacturers said earlier this month, according to Reuters.
Volkswagen, Mercedes-Benz, Ford, Toyota and General Motors, among others, employ about 116,000 in South Africa and are key for a country where about a quarter of the labour force is jobless and a considerable proportion of the output is exported.
Car industry representatives said this month they were looking for loans at low interest rates to help with cash flow. Component manufacturers said they needed at least 10bn rand (US$998.5m) in loans, Reuters said.
Economists have warned of severe job losses if carmakers and component manufacturers do not secure loans from the government.
VW has already said it would axe 400 jobs and Mercedes-Benz said it could shed about 150 jobs as domestic car sales plummet and a global economic downturn undermines demand for exports, the report added.
