SA seeking its lane in future of car production
In Japan, Nissan has just announced that its latest self-driving system, which will relieve motorists of the need for hands-on control, should be ready later this year.
The ProPilot 2.0 will enable cars to maintain following distances, switch lanes and overtake on motorways without humans touching the pedals or steering-wheel.
In Germany, Mercedes-Benz says it is working towards a 2030 deadline to build only plug-in hybrid or fully electric cars. In the US, motor and technology companies are falling over each other to be first to market with autonomous vehicles and zero-emission cars.
In SA, the motor industry's biggest challenge is to find a black-owned company able to make nuts and bolts.
Automotive may be big business in the local economy - it accounts for 29% of SA's manufacturing output, 16.2% of exports and 6.8% of GDP - but it's a baby in global terms. In 2018, SA was responsible for 0.64% of the world's vehicle production: 610,854 out of 95,634,593.
It's a mismatch reflected in developmental priorities. Whereas companies in Asia, North America and Europe plough billions into future technologies, the main concern of South African subsidiaries is to justify their immediate existence.
The Automotive Production and Development Programme (APDP), due to expire at the end of 2020, has been extended to 2035, to give motor companies and their components suppliers time to deepen and broaden their local manufacturing base.
One of the priorities will be to increase the share of local components in SA-built vehicles. These currently account for less than 40% of the value; the 2035 goal is 60%.
Almost all parts delivered to South African vehicle assembly lines are bought from local subsidiaries of multinational suppliers. That won't change much. What will change is that they will have to source more sub-components from local suppliers, many of which will be black-owned.
It's not that black industrialists can't deliver. It's just that no-one's asked them before. It's been more convenient for multinational suppliers to get their sub-components - ranging from technology-rich parts to basic widgets - from familiar partners. That won't be so easy in future. Many of the new local suppliers will be start-ups in need of mentoring and technical support.
SA's preoccupation with the here-and-now is not unique. Motor industries in other developing countries such as Vietnam, Thailand and Egypt are also there to service multinational parents, not shape them.
Nevertheless, when looking at the cutting edge of global automotive technology - the pursuit of electric, hydrogen and solar power, development of new materials and changing definitions of mobility - developments seem to belong to another industry.
One of the latest trends is quantum computing, which its proponents say has the power to make electric batteries 40% more powerful, improve component design and even end traffic jams.
SA has had its "light-bulb" moments. The Joule electric car proved local technology innovation could be world-class, even if basic economics couldn't. The project was ditched in 2012 when planners recognised what everyone else already knew: that a small South African company lacked the muscle to tackle multinationals with billions to burn.There's also the fact that motorists here show no desire to follow the global shift towards electric vehicles (EVs).Maybe it would be different if the government's tax policy wasn't anti-electric. Whereas other countries offer tax rebates and trade-in bonuses for EV buyers, SA penalises them with higher import duties. SA's well-documented electricity crisis, apparently years from resolution, also undermines the attraction of EVs. Though the rest of the world buys them by the million, SA does so by the dozen.Local fuel quality, meanwhile, is so out of date that many cars with the latest clean-burning engines can't be sold here. That includes some built in SA but limited to export markets.So will the headlong, futuristic rush by multinationals undermine emerging markets like SA when, as seems possible, vehicles driven here could eventually lag decades behind leading-edge technologies?Not according to Klaus Fröhlich, global development head at carmaker BMW. The German company said this year that in addition to the internal combustion engine, every future model range would include all-electric versions and plug-in hybrids running on a combination of electricity and petrol.The first to go this route will be the X3 sports utility vehicle, which is assembled in SA, among other countries. Electric versions, however, will not be built here for the foreseeable future.Despite the rush towards electricity and other environmentally friendly technologies, Fröhlich says motorists in SA have nothing to fear in the medium term. EVs - both cars and commercial vehicles - are forecast to account for 25% of total sales in the next few years, so combustion engines will be around for a long time to come.That's good news for the local industry which, after the government retreated on a promise to encourage local EV manufacture, concentrates on combustion engines.That doesn't mean the industry can sit on its hands.Volkswagen SA MD Thomas Schaefer has called for the government and industry to identify new-generation components that can be built long term in SA. What's the point, he asks, of investing in items that will be obsolescent by 2035?It's an interesting challenge, given that the rate of automotive development makes it hard to predict what will still be required.Even consultant Justin Barnes, a leading architect of the APDP and of the broader South African Automotive Masterplan into which it will fit, says: "One of our challenges was working out what the industry will look like in 2035, and what will happen longer term when new technologies arrive, when battery cells take over from the internal combustion engine. Do current manufacturers transition to the new technology, or do new people replace them?"
Some local components subsidiaries confirm their overseas principals are wondering if their operations in SA will fit into changing market demands.Ugo Frigerio, president of the National Association of Automotive Component and Allied Manufacturers, says the local industry need not panic. "Our vehicle manufacturers and multinational components suppliers know what's coming and will ensure their supplier base has the means to keep pace."That may be optimistic. Multinationals allocate business according to what's best for the whole network, not regional or national interests. As in the past, South African subsidiaries will have to fight for every bit of group business against equally determined family members in other countries.But Frigerio says: "As Africans and as South Africans, we understand what it means to be agile, to be constantly repositioning. Future uncertainty isn't frightening. It's exciting."email@example.com