Identifying an optimum path to developing the South African automotive industry

Date
2022-12
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH ABSTRACT: The automotive industry is a key contributor to the South African economy and has had strong government support through multiple incentive programmes since the introduction of the Motor Industry Development Plan (MIDP) in 1995. Despite this support, the South African automotive industry remains a second-tier contender in global value chains and is not yet capable of competing with the established automotive economies of the world. The introduction of the South African Automotive Masterplan to 2035 (SAAM2035) aims to transform the industry into being globally competitive. South Africa exports most of its locally produced vehicles and many of its key export markets have signalled intention to introduce internal combustion engine (ICE) vehicle bans as they move to a greener future. This research project aimed to analyse the South African automotive value chain to identify the products that have potential to be developed to a globally competitive level. Once a component was selected, the aim was to identify and evaluate the factors which impact location decisions for the activity. The research made use of both quantitative and qualitative frameworks. The Input-output Product Space (IO-PS) and the Location Determinants Evaluation Framework (LDEF) were applied to the research problem. The output of the IO-PS is a set of metrics which the researcher used to decide on a promising component to focus on. The LDEF used the selected product as input and utilises a qualitative approach involving a product-specific literature review as well as consultations and interviews with industry experts to identify key factors impacting location decisions for the product. The application of the IO-PS framework, in consideration with the SAAM2035 objectives, identified lithium-ion battery (LIB) packs as a promising component to develop. The LDEF analysed the location determinants relevant to LIB pack manufacturing and the state of these determinants in South Africa in order to rank the criticality of the factors. Ports and infrastructure management, manufacturer incentives and electricity supply were identified as critical constraining factors. The findings highlight the critical factors which need to be addressed in order to ensure that South Africa will be able to competitively manufacture LIB packs.
AFRIKAANS OPSOMMING: Die motorbedryf is 'n sleutelbydraer in die Suid-Afrikaanse Ekonomie en het sterk regeringsondersteuning deur aansporingsprogramme gehad sedert die begin van die Motor Industry Development Plan (MIDP) in 1995. Ten spyte van die ondersteuning, is die Suid-Afrikaanse Motorbedryf ân tweede vlak aanspraakmaker in die globale waarde ketting en is nog nie in staat om mee te ding met die gevestigde motorbedryf ekonomieë van die wereld nie. Die introduksie van die South African Automotive Masterplan to 2035 (SAAM2035) beoog om die motorbedryf te transformeer om wereldwyd mededingend te wees. Suid-Afrika voer meeste van die plaaslik vervaardigde motors uit en baie van die sleutel uitvoer markte het hulle voorneme aangedui om binnebrandenjin (ICE) motors te verbied soos hulle na 'n groener toekoms toe beweeg. Hierdie navorsingsprojek het beoog om die Suid-Afrikaanse motorbedryf se waarde ketting te analiseer, om produkte te identifiseer wat die potensiaal het om na ân wereld mededinge vlak toe, te kan ontwikkel. Toe ân komponent eers gekies is, was die doelwit om die faktore te identifiseer en te evalueer wat ân impak op die liggingsbesluit vir die aktiwiteit het. Met die navorsing is daar gebruik gemaak van kwantitatiewe en kwalitatiewe raamwerke. Die Input-ouput Product Space (IO-PS) en die Location Determinants Evaluation Framework (LDEF) was toegepas op die navorsingsprobleem. Die uitset van die IO-PS is n stel metrieke wat die navorser gebruik het om te besluit op 'n belowende komponent, om op te fokus. Die LDEF het die gekose komponent as inset gekies and gebruik 'n kwalitatiewe benadering wat 'n produk spesifieke literatuur resensie, sowel as konsultasies en onderhoude met kenners in die bedryf insluit, om sleutel faktore te identifiseer wat liggingsbesluite vir die komponent indentifiseer. Die toepassing van die IO-PS raamwerk, met in ag name van SAAM2023 doelwitte, het die litium-ioon batterypak (LIB) as 'n belowende komponent geidentifiseer om te ontwikkel. Die LDEF het die ligging determinante wat relevant is aan LIB pak vervaardiging en die toestand van die determinante in Suid-Afrika om die kritiekaliteit van die faktore te rangskik. Hawens en infrastruktuur bestuur, vervaardiger aansporingsprogramme en elektrisiteitsvoorsiening was ge identifiseer as kritiese beperkende faktore. Die bevindinge beklemtoon die kritiese faktore wat aangespreek en verbeter moet word om seker te maak dat Suid-Afrika kompeterende LIB pakke sal kan vervaardig.
Description
Thesis (MEng) -- Stellenbosch University, 2022.
Keywords
South Africa, automotive, electric vehicle production, lithium ion batteries, industrial policy, Automobile industry and trade -- South Africa, Electric vehicles -- South Africa, Industrial policy -- South Africa, Government aid -- South Africa, UCTD
Citation