Industry

EE Quality Solutions, provide Innovative Engineering Solutions to the Auto industries.

Industry Overview

For decades, the automotive industry has been fundamental to South Africa’s economy.

It contributed 6.8% (4.3% manufacturing and 2.5% retail) to GDP in 2018. In addition, automotive exports are valued at nearly R180bn, and comprised 14.3% of South African exports. Moreover, in 2018 the industry employed around 110 000 people (across vehicle and component manufacturing), producing over half a million vehicles.

This makes South Africa the largest automotive producer in Africa (54.3%) with many of the major OEMs operating in South Africa. However, Morocco – the second largest African producer – has increased production significantly, and produces more passenger cars than South Africa.

Trends in the Industry

OEMs across the world are adopting strategic sourcing of value added assemblies/services to derive substantial cost efficiencies from their manufacturing processes. In addition to substantial cost savings, OEMs derive other important benefits such as improved quality by reducing congestion on the line through offline assembly, improved material flow with reduced supervision, improved efficiency in assembly, increased flexibility meeting customer demand, improved quality and positive environmental effects, improved HPV and the companies get to focus on their core business.

There is a surging interest in localisation from local Original Equipment Manufacturers (OEMs) for both existing and new products. Local OEMs are wanting to increase their purchases from South Africa suppliers. This is a key finding of the South African Automotive Supplier Industry Benchmark Report 2018 produced by B&M Analysts for the National Association of Automotive Component and Allied Manufacturers (NAACAM) supported by National Association of Automobile Manufacturers of South Africa (NAAMSA) reports.

Major Trends in Target Markets

Growth

Competitiveness