South Africa’s Component Manufacturing Landscape:

Challenging the Past to improve the future.

Dr Johan van ZylPresident : NAAMSA

CEO Africa Region: Toyota SA Motors2014-10-14

World Leader in fiscal policies and fiscal compliance

What we Know …….

Fundamental requirements for economic growth

Source: www.tradingeconomics.com

Labour Cost is Worst of BRICS

Find our Competitive Advantage

Weakness

Build to print industry Assembler culture Limited skills and resources Low local content (value added) International not competitive

Strength

Wide supplier base to the 7 OEM‘s Availablity of basic raw materials International certification of

management systems Strong automotive assembly

experience

Threat

Political situation High crime level Free capacities in Asia and

Europe Monopoly situation of suppliers Price increases

Opportunities

Export of single components Local OEM‘s to use common

suppliers Localisation of current CKD parts Currency development APDP / BBBEE IPAP Initiative to support supplier

Strength lies within…. SWOT Analysis

Availability of basic

Raw Materials

Mineral Resources is Key

ExportDestinations:

China, Europe

12th of 38 countries

Lead

1 2 3 4 5 6 7 8 9 1011121314151617181920212223242526272829303132333435363738

Why……..Our Resources

LCR = 98%Example – LA

Batteries CIM<1

ExportDestinations:

China, Europe, Japan, Asia-Pacific, Middle East, South

Korea

Iron

6th Largest of 50

LCR = 35%

ExportDestinations:

China1 2 3 4 57 8 9

13 1416 15

1921 22 23

27 28

33 34

41 42 43

9th of 43 countries

Aluminium

ExportDestinations:

China, Europe

20th of 45 countries

Copper

1 24 5

79 8

1214 15

1820

22 2325

27

34 35 36

4345

LCR = 58% LCR = 41%

Resin Compounding

Coal Synthetic Fuel

6th of 33 countriesLCR = 4%

Beneficiation = Biggest Opportunity

Scenario……..

Ave kg/Vehicle

Steel Aluminium Copper ResinOther

MaterialsLocal (40%) 290 96 16 3 163

Import (60%) 540 (65%) 139 (59%) 12 (42%) 65 (96%) 108 (40%)

Total 830 235 28 68 271Typical Vehicle Average

Main Commodities

Typical Total Vehicle Average: 1432 kg

If reduced by 10%

Beneficiation: 103,000t / year R 2.5 billion / year

7

Commodity Pricing• Why Import Parity?• Pay US$ for ZAR Cost base?• Beneficiation

Technology Support• Collaboration• Investment• Skills

Automotive Growth

Competitive Localisation

Items to Fix……..

Improved

Future

Thank You