South Africa Is Pushing Carmakers To Do Business With Black Owned Suppliers

Apartheid in South Africa ensured that the nation’s white minority ruled politically, socially and economically. Formally, apartheid ended in the 1990s but the economic and social impacts most certainly linger. Black unemployment is roughly four times that of whites, with well over half of the nation’s Black population living in poverty. Blacks happen to be 80 percent of the population. All of this makes the health of Black businesses vital and two car manufacturers are teaming up to help one such company, Algoa Components Manufacturers (ACM).

The City Hall in Darling Street, built in 1905 is one of the landmarks of the city centre (Cape Town, South Africa).

ACM is a Black owned supplier that makes fuel fillers, side impact beams and instrument panel carriers. Based in Port Elizabeth, the company recently expressed concerns about its future prospects. In response, Toyota South Africa Motors (TSAM) and Isuzu Motors South Africa (IMSA) have teamed up with ACM in a Black Supplier Development program. The program will feature a great deal of mentoring, aimed at improving ACM’s production capacity and future sustainability. In addition, TSAM and Isuzu have committed to assisting ACM in improving “product process flows, plant layout, space utilization and the determination of material and manning standards.” IMSA and TSAM’s actions must be viewed in the broader context of the government’s activity.

The South African government understands the importance of the automotive industry to the nation’s economy. That’s why in 2016 the Department of Trade and Industry commissioned the development of a South African Automotive Masterplan (SAAM). In a nutshell, the objectives are:

  1. Achieve 1% of global vehicle production by 2035 (increase from current 600 000 units to almost 1.4 million units a year)
  2. Increase local content from current 39% to 60%
  3. Double employment in the value chain from current levels to about  240 000
  4. Achieve at least level 4 BEE status from 2021
  5. Support to be based on value addition rather than production sales value

Nisbet affirmed that the local automotive industry needs to increase local content from just under 40 percent to 60 percent over the next few years, to comply with SAAM. Also, part of the vision of SAAM is “greater inclusion of Black-owned firms within the automotive value chain.” Toyota has stated that the aims of SAAM and the development of Black owned suppliers are indeed company priorities. Isuzu Motors South Africa has also stated that they are committed to “broad-based Black economic empowerment (BBBEE)” and is gladly working towards a more inclusive automotive value chain.

Leave a Reply

Your email address will not be published. Required fields are marked *