South Africa's automotive sector
South Africa's automotive industry has approximately 36,000 employees and a GDP share of 7.3 percent, which makes it one of the country's major industries. Most of the large German vehicle manufacturers are represented in South Africa with their own production facilities in whose wake a broad local network of suppliers has emerged. Many German companies have established plants in South Africa; in particular Volkswagen, Mercedes-Benz, BMW and MAN have been in the country for several decades.
Volkswagen has had a factory in Uitenhage (Eastern Cape) since 1951 and currently employs approximately 6,000 people. Of 120,000 vehicles produced annually, a total of 40,000 are exported to other African countries. In the passenger car segment, the VW Group has a market share of roughly 22.1 percent in South Africa.
Enlarge image Volkswagen production in Uitenhage (© picture-alliance / dpa)
The 5,000 employees of BMW in South Africa produce about 55,000 vehicles a year. Founded in 1968, BMW's Rosslyn plant (Gauteng province) has produced more than 300,000 vehicles of the current 3-series and also plays an important role in the production of vehicle equipment.
Mercedes-Benz has been in South Africa since 1954 and produces the C-Class, among other vehicles, in East London (also in the Eastern Cape). Overall, Mercedes-Benz produced 55,900 vehicles in South Africa in 2010. During the same year Mercedes-Benz sold 25,400 cars and 6,100 trucks on the local market.
MAN is present with a factory in South Africa since 1968 and is well positioned in the market. The company today maintains two plants and a spare parts depot. The 393 employees produce approximately 2,500 vehicles annually that are sold almost entirely on the markets of southern Africa.
There are also many small and medium-sized German enterprises producing vehicle parts and equipment in South Africa, which account for a significant share of growth and output of the South African automotive industry.
Enlarge image Mercedes-Benz plant in East London (© MBSA) The year 2010 was one of recovery for the South African motor industry. After a massive decline in numbers the previous year, an increase of 24.7 percent to 492,956 units was registered for 2010. Exports grew to about 239,000 vehicles and the industry expects to cross the 300,000 mark for 2011. The industry recognizes the favourable situation in South Africa, a reflection of which are the plans of almost all the local car manufacturers to invest there in the near future (together totalling approximately 1.5 billion Euro).
South Africa is a valuable and distinct location for the automotive sector, not only because of the sales market, but also as a stepping stone to other markets in Africa. In addition to the unique role of the entire automotive industry as an employer providing skilled jobs in the most advanced factories, many German companies place a high priority on corporate social responsibility and are active in supporting the communities where they operate as well as their employees.
The industry is awarded particular attention by the South African government, which supports the industry through the Motor Industry Development Programme (MIDP). The successor to the MIDP, the Automotive Production and Development Programme (APDP), will launch in 2013.